Anglesey Aluminium

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Anglesey Aluminium is joint owned by Rio Tinto (51 per cent) and Kaiser Aluminium & Chemical Corporation (Kaiser) (49 per cent). They ran a primary aluminium smelter in Anglesey, Wales, which was closed in September 2009. [1]

Government Subsidisation

Before the closure of the smelter lobbying by local MP Albert Owen, the Aluminium Federation and its All-Party Parliamentary Group for the UK Aluminium Industry attempted to secure large government subsidies for the price of their electricity.

Figures on the amount suggested vary considerably:

In a parliamentary debate in February 2010 MP Philip Dunne, a member of the ALFED's All-Party Parliamentary Group for the UK Aluminium Industry, reveals that 'the Government tried to put in place a rescue package worth some £12 million a year for four years to subsidise energy costs' at the now-closed Anglesey Aluminium smelter, claiming that this massive package had nonetheless failed. He quotes David Bloor, managing director of Anglesey Aluminium who had 'explained to Members at a presentation in December'[2] that;

"Anglesey Aluminium could not afford to buy power in the UK and reach a breakeven financial position. This is because the worldwide price of aluminium does not include a cost of carbon."[3]

Another member of the ALFED's all party parliamentary group Albert Owens has supported the heavy subsidisation of the price of electricity to the Anglesey Aluminium smelter, which was affected in January 2009 by EU legislation banning state subsidisation of private companies. He supported a £48 million package to save the smelter, which closed in Sept 09 after the proposal was turned down.[4].

Another article in the Australian Daily Telegraph, quotes Holyhead mayor David Chorlton confirming that this £48 million offer had been made.[5]

Secretary for Business Peter Mandelson even stepped in and called Rio's chairman to make an unsuccessful personal plea.[6]. He was eager to help with subsidies, claiming; "I'm going to look at the energy contract that's really the core of the problem." [7]

A letter to the Liverpool Daily post in July 2009 makes the point that while begging the government for taxpayers' subsidies Rio Tinto was listed 3rd in the FTSE 100 index at 2158, making it far from desperate for money. [8]

Plant closure

The decision by Rio Tinto to close the plant is thought to be part of a global cut back in their aluminium smelting capacity to match a drop in the global aluminium price by 5%. [9]

The supply of cheap energy from Wlyfa nuclear plant was also coming to an end with the nuclear plants closure in Sept 09.


Notes

  1. Anglesey Aluminium website home Accessed 16/04/10
  2. Philip Dunne, Hansard, House of Commons, 2nd Feb 2010 : Column 275 - 279 'Aluminium Industry' Accessed 06/04/10
  3. Philip Dunne, Hansard, House of Commons, 2nd Feb 2010 : Column 275 - 279 'Aluminium Industry' Accessed 06/04/10
  4. Alex Stevenson Election focus: Ynys Mon Politics.co.uk website. Accessed 07/04/10
  5. Charles Miranda, 'Rio cuts kill off island economy' The Daily Telegraph (Australia). December 28, 2009
  6. Charles Miranda, 'Rio cuts kill off island economy' The Daily Telegraph (Australia). December 28, 2009
  7. Owen Hughes, 'CRISIS: WHAT DOES FUTURE HOLD? MD vow as he urges government to seal a new power deal He also reveals his 'Plan B' to save plant SPECIAL REPORT' Daily Post (Liverpool) January 16, 2009 Friday.
  8. P Webb, Valley.'Why Help Plant?' Letter to Daily Post (Liverpool). July 9, 2009 Thursday
  9. Charles Miranda, 'Rio cuts kill off island economy' The Daily Telegraph (Australia). December 28, 2009