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Alcan closure explained

Aluminium at Rio Tinto Alcan in Lynemouth Credit: ITV

The Alcan smelter near Ashington already has marginal profits, but a carbon tax due in 2013 would make it lose money. Rio Tinto estimates the tax would cost tens of millions of pounds by 2016, and with only a slight profit, it no longer wants to keep the plant open.

The smelter has been shutdown and the process now begins to decommission the main site. The company also has contracts it has to honour with customers, so it will continue to cast aluminium from used metal in the short-term.

However, aluminium that has been made from scratch will end not only inNorthumberland, but in England too. By the end of May, 323 of the workers will be out of work. Another 60 will continue casting, but that ends by 2013.

From newsagents to distribution, the knock-on effect in the supply chain could be in the thousands, with the GMB estimating that the whole operation brought £60m to the regional economy.

Rio Tinto: "We had to avoid Carbon Tax"

John McCabe, Regional Economic Development Director at Rio Tinto Credit: ITV

We asked Rio Tinto whether workers were given enough notice that the plant was under threat.John McCabe from Rio Tinto, Regional Economic Development Director, said: "We made the entire workforce aware as quickly as we could after the strategic review."

"We also extended the statutory consultation period as well.""We had to avoid the Carbon tax that comes in 2013. The plant was already marginal."


Aluminium smelter to close

The Rio Tinto Alcan plant at Lynemouth, Northumberland Credit: ITV

An aluminium smelter in Northumberland will close this afternoon.

The smelter, at Rio Tinto Alcan in Lynemouth, is closing at 2pm after an extensive consultation period with employee representatives.

More than 500 people are currently employed at the plant. Over 300 will be made redundant in May, and around 60 employees will remain on site beyond the closure of all operations to work on decommissioning the plant.

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