In a blow to the economy of the island of Angelsey in Wales, UK, albeit an expected one, the almost 40-year old Angelsey aluminium smelter, jointly owned by Rio Tinto (51 percent) and Kaiser Aluminum (49 percent), is likely to close in September when its current power supply contract ends.

In a statement today, Rio Tinto says Anglesey, which employs approximately 500 people, has worked intensively with UK government authorities and agencies to find a sustainable alternative to the power supply needs of the smelter, but has been unable to reach a feasible solution. The proposed curtailment of the smelting operations will now be the subject of consultation with affected employees through the appropriate representative bodies.

The company will evaluate alternative operating activities, including the continuation of remelt and casting operations at Anglesey and the production of anodes for use by other smelting facilities, although it is hard to see how such limited operations could be continued indefinitely, or even profitably, as these are also power hungry processes.

David Bloor, managing director of Anglesey Aluminium, noted  The operation is dependent for its power on the nearby Wylfa nuclear power station which is itself due for closure within the next few years. We are fully  aware of the significant impact on the workforce and on the local community and will work with partners and stakeholders to develop other long term options in line with existing operations, the needs of the local community, and the economic market situation.

Anglesey Aluminium was established as a joint venture between Rio Tinto and Kaiser Aluminum in 1971 and currently has an annual production capacity of 145,000 tonnes.

On an island with a population of under 70,000 people, the loss of a major employer of this type is a serious blow and not easily replaceable.  Angelsey Aluminium says it hopes to retain some activity at the plant, but this would be on a very small scale relative to a full smelting operation.  With the global financial meltdown affecting the metals sector particularly badly, and with Rio's debt problems, the financial costs of keeping the smelter running at far higher power input costs is just not feasible.