Island Aluminium Smelter To Close
by David Phillips
Anglesey Aluminium Metal (AAM) announces its Holyhead smelter will close in September when its electricity supply contract expires.
The island smelter employs over 500 people and gets its power from the local Wylfa nuclear power station, which is set to close in 2010.
Electricity counts for about one third of production costs and it seems that AAM has not been able to secure a viable new electricity source in time.
Joint owners Kaiser Aluminium (49 per cent) and Rio Tinto group (51 per cent) say they expect the Holyhead plant, which consumes about 12 per cent of electricity in Wales, to finally shutdown in September.
This comes after the plant had recovered from a serious fire last June in a transformer which led to a two thirds cut in capacity.
Rio Tinto says it is too early to speculate on the extent of possible job losses, and there will now be a period of consultation with staff.
It may be possible, according to AAM, to consider alternative activities at the Holyhead plant, such as smelt and recasting.
David Bloor, Managing Director at AAM, fully understands the profound impact of this decision on staff, their families and the local island community.
The company will look at all practical long term alternative options with local stakeholders, in line with community needs and the global market conditions.
Local MP Albert Owen is still hopeful that a new temporary power supply can be secured, saying that the social impact of Anglesey Aluminium closing will hit not just the island but reverberate across Wales and the wider UK economy.
The closure of the Holyhead plant comes against a significant fall in smelter capacity by aluminium producers across the world.
Rio Tinto and Alcoa Inc. , two major global producers, have had to close down plants and shelve new projects as the aluminium price has fallen over 40 per cent in the past year.
With falling world growth the demand for the metal used in airplane and car manufacture among many other applications has impacted down to the smelting stage of primary aluminium.
This news for the island smelter comes just when two German power companies E.ON and RWE are on the verge of building new nuclear plants in the UK including one at Wylfa.
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