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Rio to axe smelter due to rising energy costs

Rio Tinto Alcan is to close its aluminium smelter at Lynemouth, Northumberland, citing rising energy costs that have made the facility unsustainable.

The company also plans to sell a power station at the site, which it hopes will continue to operate under new ownership. The power plant employs 111 people and the smelter 515.

Chief executive Jacynthe Côté 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.”

The Lynemouth facility has been operating for 40 years.

Confederation of British Industry (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.”

The closure is subject to completion of a 90-day consultation process with employees and union representatives. Rio Tinto Alcan has said it will support employees by offering re-training and job search assistance. It added that it was committed to supporting local initiatives to identify and develop opportunities to promote economic growth in the region, and continue to support its customers.

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