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Green Suicide: Emission Rules Threaten More Manufacturing Jobs

European legislation has thrown the future of 750 jobs in the North of England into doubt after Rio Tinto said that it would dispose of one of its smelters there.

The Anglo-Australian miner announced plans yesterday to sell global assets worth an estimated $8 billion (£5 billion) as it looks to restructure its aluminium division.

One asset that Rio wants to offload is the Northumberland-based Lynemouth smelter and power station. However, union officials and politicians are concerned that the company might struggle to find a buyer because of legislation that requires huge investment. The power station breaches limits imposed by the European Union and must reduce emissions and buy [carbon] credits to stay open after 2013.

Rio hinted at the problem yesterday when it said that Lynemouth could be closed if a buyer was not found.

Aluminium smelters need large amounts of energy to operate and typically have a dedicated source of power. The Lynemouth smelter, which produces 178,000 tonnes of aluminium a year, was established in 1974 to take advantage of local coal. The Government invested heavily in the project to provide employment as coalmines shut down. Rio has been in talks with the Government to turn its power station into a biomass-burning generator, but this would be expensive.

About 620 people are employed at the smelter and a further 120 at the power station.

Sir Alan Beith, the local MP, said: “Rio Tinto seems determined to concentrate its aluminium interests in areas where energy is cheaper or the regulatory regime is less tight. We have talked to them about other options but I am not sure they are serious about trying to keep Lynemouth open.”

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Alcan aluminium smelter jobs under threat

A THREAT to hundreds of jobs in Northumberland was raised yesterday when the owners of an aluminium plant said it was considering closure.

Rio Tinto, which owns the smelting plant in Lynemouth, has revealed plans to “streamline its aluminium interests” which include the 650-job smelter and power station in Northumberland.

North East MPs and union officials called the news of the possible closure “potentially devastating” and urged the Government to intervene.

Rio Tinto is selling six aluminium plants in Australia and New Zealand while a group of “non-core” assets, which include the Northumberland site, will be managed by the company until a final decision is made about their future.

John McCabe, Alcan Aluminium UK Corporate Director said: “We have not found a buyer for the smelter which employs 510 people so closure is a potential option, but we do have an interested party for the power station where 120 people are employed.”

The power station burns coal to provide electricity to the smelter, so any new operator would have to bear the cost of converting it to a more environmentally friendly biomass system.

Alcan was given planning permission for a biomass plant earlier this year.

So far there has been no interest in the smelter.

The company said that rising energy prices had resulted in higher operational costs and expensive environmental changes are also now needed to upgrade the plant. No decision has been taken on when the smelter could shut, but the company has had talks with unions representing staff.

Journal Live, 18 October 2011