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Rio Tinto Alcan reduces production

The trend of reduced aluminium production has continued as Rio Tinto Alcan has announced it is dropping production levels and cutting costs in response to global economic conditions.

This news follows Alcoas similar announcement earlier this month that it was shedding jobs and reducing production.

In a statement Rio Tinto Alcan said it was reducing production by a further six per cent, bringing the total reduction to approximately 11 per cent. About 1,100 jobs will also be lost at company facilities around the world.

As previously announced, the end of smelting operations at the UKs Anglesey Aluminium joint venture is expected in September 2009, when the current power contract expires. The impact of this closure is included in these figures, the statement said.

Scrap market effects
Commenting on this development an industry expert told MRW: This will have an effect, and [the scrap] market prices should go up because [material supply] is less glutted. But Rio Tinto Alcan and Alcoa are only closing because the market is so stagnant.

But it could mean more demand for scrap yards when global and domestic demand increases again because it will take these producers a while to fire up their works.

Rio Tinto Alcan Primary Metal president and chief executive Jacynthe Côté said: "We realise that the measures we're announcing will have serious impacts on our employees and local communities. The global economic downturn has meant that we must make difficult but necessary choices for our organisation, and we will make sure that those affected are treated with fairness and respect."

Rio Tinto Announcement in brief
* A further six per cent reduction in aluminium production, bringing the total reduction to about 11 per cent, and close to six per cent reduction in alumina production
* Reduction in global workforce by about 1,100 roles (300 contractors and 800 employees)
* Substantial cost reduction programmes in Rio Tinto Alcan facilities worldwide
* Permanent closure of Beauharnois smelter in Quebec, Canada
* Production at Vaudreuil alumina refinery in Canada to be temporarily reduced by 400,000 tonnes
* Expected sale of interest in Alcan Ningxia joint venture in China
* Anticipated ending of smelting operations at UK Anglesey Aluminium joint venture in September 2009 when the current power contract expires.


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