Permanent Closure of Holyhead Aluminium Smelter Still Possible

by Brian

Kaiser Aluminium Corporation which owns 49 per cent of Anglesey Aluminium Metal at Holyhead ( with Rio Tinto (51 per cent))has suggested that the smelter may still close at the year end.

The recent outage at the Holyhead plant has had significant impact on production of aluminium, to the extent that it has cost around $20 million to Kaiser.

The company announced a net loss of £22m in its third quarter results.

Anglesey Aluminium has an electricity supply contract with the local Wylfa Nuclear Power station, which is due to close in December 2010.

The supply contract expires in September 2009 and so there is a need to secure a new, reliable and competitively priced supply of electricity if the plant is to remain in production.

So while the Rio Tinto Kaiser smelter looks for another source of power, the option to go for permanent closure is still being considered.

All this is happening against a global commodities background which has seen aluminium producers reducing their production due to falling demand worldwide.

Just consider that on the London Metal Exchange, a major global exchange for refined base metals, aluminium prices have fallen from a peak of around $3,380 per metric ton in July to below $2,000 at the end of October.

The coming weeks and months will be a time of difficult decision for Rio Tinto and Kaiser, with potentially serious consequences for employment on Anglesey.

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