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Firm holding talks over Alcan buyout

THE largest employer in Northumberland has been holding discussions with two companies interested in buying it out.

Rio Tinto Alcan aluminium complex at Lynemouth, Northumberland,
Rio Tinto Alcan aluminium complex at Lynemouth, Northumberland,

THE largest employer in Northumberland has been holding discussions with two companies interested in buying it out.

Rio Tinto Alcan, which runs a smelter and power station in Lynemouth, south east Northumberland, has been holding talks with two separate companies, one of which is interested in buying the smelter and the other the power station.

Rio Tinto has previously stated it would consider selling up as one of the solutions to the problems caused by a European Court of Justice ruling to cut emissions and the Government’s Carbon Floor Price, which ensures the price on carbon does not fall below a set level.

The plans will end up costing the company an extra £40m a year by 2013, wiping out its annual profits, and so it is holding a strategic review to find the best solution.

While the 650-job company is pressing ahead with conversion to biomass, it has made clear that it could still sell or even close the plant.

Now, the company has revealed that it has potential buyers for the site. Corporate affairs director John McCabe was reluctant to reveal how far advanced the talks were. However, discussions over the smelter have been going for “a period of weeks”, while those over the power station have been going for a couple of months.

He said: “We are keeping the workforce informed and there are no guarantees about the outcome of these discussions.

“This is a process which will take some time to reach a conclusion and discussions are ongoing. What Rio Tinto wants to achieve is, if it can, a sustainable future for the two plants. There may well be other expressions of interest.”

Mr McCabe would not reveal any details about the potential buyers but Wansbeck MP Ian Lavery said the party interested in buying the smelter owned smelters worldwide. The potential buyer, who has “a very high profile”, had invited Mr Lavery to meet him.

Mr Lavery said: “We discussed converting to biomass and the aluminium market. They will come up with some sort of plan and if they’re going to take it forward there will be more meetings.

“It was very positive there are people interested in the power station and smelter. It would be better if someone bought them together. If that’s not to happen we’ve just got to progress the best way we can.

“I would prefer Rio Tinto to keep the business. I’m not promoting it to be sold off. However, if it’s sold off, whatever it takes from my side I’m prepared to assist.

“Rio Tinto are keeping it very close to their chest. I’ve only been invited to one discussion. Rio Tinto haven’t involved me in any discussions with a third party, and that’s probably the right thing to do.

“I know there’s a number of issues. Rio Tinto is waiting on Government announcements about the future energy requirements of the nation.”

Mr Lavery said he is confident that interested parties would prioritise jobs in the area.

 

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