Soaring energy costs and legislation close UK smelting site

More than 600 jobs are at risk after a mining company announced plans to close its aluminium smelting factory and power station over rising energy costs and legislation.

Rio Tinto Alcan said last night (November 16), following a 90-day consultation process, it would close the Lynemouth aluminium smelter in Northumberland which employs 515 people.

The company blamed rising energy prices, which it put down to ’emerging legislation’, as the main reason behind the plans.

Lynemouth also has a power station on the site, where a further 111 people earn their living, which the company hopes can be sold.

The overall site, which would be 40 years old next year after opening in 1972, is ‘no longer sustainable’ due to increasing energy costs said Rio Tinto Alcan chief executive Jacynthe Cote.

Mrs Cote said: “This decision follows a thorough strategic review which explored every possible option for continuing to operate the smelter and power station.

“However, it is clear the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation.

“We are hopeful that the power station can remain in operation under new ownership.”

CBI deputy director-general, Dr Neil Bentley, said: “This news shows why the Government must act to insulate manufacturers most at risk from the increasing cost of energy legislation.

“Energy intensive companies make the very products the UK needs to move to a low-carbon economy, and are already being hit by rising energy prices and slower demand.

“The CBI proposes targeting companies most at risk with an exemption from the carbon floor price.”

Luke Walsh

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