UP TO 30 jobs are being created at the Alcan aluminium smelter in Lynemouth, Northumberland, as the company looks to return to full production for the first time in almost two years.
With a revival in global demand for aluminium, and prices having risen 70% from their floor in 2008, Alcan’s parent company Rio Tinto has decided to return to full capacity at the country’s biggest aluminium smelter, which is also the county’s biggest private employer.
The plant had cut production by a third in late 2008 as the world economy headed into recession and vehicle producers – one of the major end users of Lynemouth stock – cut output by 50%. But the price of the metal has now risen from around US $1,300 per tonnes at the end of 2008 to US $2,200 per tonnes this year.
The rise has been described as “stellar” following a surge in demand from the automotive and other consumer sectors.
Wyn Jones OBE, managing director of Rio Tinto Alcan’s UK operations, said: “We expect to be back to full production by the end of the year.
“We have begun re-starting all the pots which were closed down. This process takes a lot longer than closing them down and we expect to be operating at full capacity once more by the end of the year.
“This will be the first time in two years we have been operating at full capacity. We had to lay off staff when the production was cut but we have begun recruiting again."
Mr Jones, who is retiring from his post at the end of the month, expects around 30 staff to be recruited, bringing numbers back to the 650.
In November 2008, we reported how Alcan had shut 128 of its 352 aluminium smelting pots, saying it did not expect to open them for at least a year, but it has taken longer then expected to due to the depth and severity of the recession.
Wansbeck MP Ian Lavery said: “There has been bad news for the Northumberland economy for months, if not years, so it’s good to see the principal employer taking on some more people.
“We are going to be hard hit here by public service cutbacks so every single job is now vital to the local community.”
Rio Tinto’s decision to bring all the Lynemouth pots into production will have been encouraged by the current market for aluminium, which is “contango”, where future market prices are higher than current market prices
This is being encouraged by the current trend, which is seeing holders of aluminium retaining existing stock which was purchased at the lower prices to act almost as a capital reserve.
Smelters across the world are all heading back to full production to cope with demands for aluminium. Earlier this year, Alcan decided to spend millions of pounds to meet European pollution guidelines
In April, the European Court of Justice ordered Rio Tinto Alcan to cut emissions from its coal-fired power station or face the threat of closure.
Alcan later said it was intending to comply with the judgement by joining the National Emissions Reduction Plan (NERP), which will see it purchase sulphur dioxide and nitrogen oxide credits.