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Alcan's Lynemouth plant still at risk despite recovery
Edited by : AL CIRCLE
2 min read
CONCERNS remain over the future of the Alcan aluminium smelting plant at Lynemouth, despite a surge in metal prices helping the firm return to profit.
Alcan Aluminium UK recorded a pre-tax profit of £30.1m last year, compared to a loss of £35.3m during 2009, while turnover increased from £254.9m to £337.7m.
The firm said that the market price for primary aluminium had increased by 16% last year and that its value has continued to strengthen throughout 2011.
The improvements in price has allowed the Lynemouth site to begin reinstating some of the pots used to create its metals, with the firm deciding to mothball a third of the 352 pots at the site over recent years.
Rio Tinto Alcan, which also has a site at Lochaber in Scotland, now believes the Lynemouth site will begin producing at full capacity by the end of the year.
Although the figures provide a timely boost for Alcan, concerns still remain over the viability of the Lynemouth plant in light of incoming Government legislation.
Parent company Rio Tinto is undertaking a full review of its future after failing to become exempt from European statutory requirements which will force it to drastically reduce the 7,500 tonnes of nitrogen oxide and 18,000 tonnes of sulphur dioxide the plant emits each year.
The issue is compounded by plans to introduce a Carbon Floor Price in 2013, which will require industries to pay a top up if the market price of carbon falls below a certain level. Part of its policy states polluters must pay a minimum amount of money, likely to be in the form of tax payable to the Treasury, for the right to pollute.
Both measures are set to have a major impact on the company’s day to day operations, and could see the Lynemouth plant facing additional running costs of up to £40m a year by 2013.
Alcan Aluminium UK recorded a pre-tax profit of £30.1m last year, compared to a loss of £35.3m during 2009, while turnover increased from £254.9m to £337.7m.
The firm said that the market price for primary aluminium had increased by 16% last year and that its value has continued to strengthen throughout 2011.
The improvements in price has allowed the Lynemouth site to begin reinstating some of the pots used to create its metals, with the firm deciding to mothball a third of the 352 pots at the site over recent years.
Rio Tinto Alcan, which also has a site at Lochaber in Scotland, now believes the Lynemouth site will begin producing at full capacity by the end of the year.
Although the figures provide a timely boost for Alcan, concerns still remain over the viability of the Lynemouth plant in light of incoming Government legislation.
Parent company Rio Tinto is undertaking a full review of its future after failing to become exempt from European statutory requirements which will force it to drastically reduce the 7,500 tonnes of nitrogen oxide and 18,000 tonnes of sulphur dioxide the plant emits each year.
The issue is compounded by plans to introduce a Carbon Floor Price in 2013, which will require industries to pay a top up if the market price of carbon falls below a certain level. Part of its policy states polluters must pay a minimum amount of money, likely to be in the form of tax payable to the Treasury, for the right to pollute.
Both measures are set to have a major impact on the company’s day to day operations, and could see the Lynemouth plant facing additional running costs of up to £40m a year by 2013.
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