NORTHUMBERLAND'S biggest private sector employer, Rio Tinto Alcan, has announced it is to close the Lynemouth aluminium smelter with the loss of more than 500 jobs.
The firm will now conduct a 90-day consultation process with staff and union representatives.
There are also fears over a further 100 jobs as the company also revealed it is in discussions regarding the potential sale of the power station at the site.
The Lynemouth smelter opened in 1972 and employs 515 people. An additional 111 are employed at the power station.
A statement from the firm said all affected workers will receive support, including re-training and job-search assistance, in order to mitigate the impact of any closure.
Rio Tinto Alcan chief executive Jacynthe C¤t› 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. We are hopeful that the power station can remain in operation under new ownership.
For 40 years, the Lynemouth smelter and power station have been important parts of the community and we will work with our employees and other key stakeholders to ensure that the social and environmental consequences of todays announcement are managed in the most sensitive way.
We are also committed to supporting local initiatives to identify and develop alternative opportunities that promote regional economic development. Finally, we will also continue to support our valued customers.
The news comes after the county council said 10 days ago that it was hoping for the best but preparing for the worst over the future of the two operations.
Council leader Jeff Reid told council colleagues at a meeting in Morpeth that the authority had a responsibility to plan for the worst-case scenario of closure.
The news casts a further shadow over the whole of the North East as it is thought that the smelter and power station support a further 3,000 indirect jobs across the region.
The plant is estimated to contribute s60m to Northumberlands economy and s118m to the wider region.