CBI plea after aluminium plant closure announcement

London – UK business group the CBI has called for a new approach to environmental regulation in response to Rio Tinto Alcan’s planned closure of its aluminium smelting plant at Lynemouth in Northumberland.

According to Dr Neil Bentley, CBI deputy director-general, the closure announcement 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,” said Bentley. “The CBI proposes targeting companies most at risk with an exemption from the carbon floor price.”

The Lynemouth smelter employs 515 people, with another 111 employed at the power station. The company has started a 90-day consultation with staff and union reps, and is also in talks regarding the possible sale of the power station at the site.

“This decision follows a thorough strategic review that explored every possible option for continuing to operate the smelter and power station<” said Jacynthe Côté, chief executive of Rio Tinto Alcan.

“However, it is clear that the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation.”