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Hydro sees late hope for German aluminium plant

Friday, Jun 26, 2009
HAMBURG, June 24 (Reuters) - Germany's plan to give special state aid to the metals industry could give hope to a major aluminium plant in the country threatened with closure, Hydro Aluminium, the local unit of Norwegian group Norsk Hydro, said on Wednesday. Hydro said in April it may stop production at its loss-making aluminium plant at Neuss in June because of high German electricity costs and weak demand. But plans by Germany's ruling government coalition to give extra aid of 40 million euros to help the non-ferrous metal industry overcome the impact of the economic slowdown and high German power costs could give hope to the plant, said Hydro Aluminium spokesman Michael Peter Steffen. "The announcement from the government coalition gives cause for hope in the last minute," Steffen said. "We now need to urgently find out what exactly the rules will be for this aid and exactly how individual locations will be assisted. "We have not yet received concrete information about what this plan will mean for our plant and our jobs." Politicians in Germany's ruling conservative-social democratic coalition agreed in principle last week to make the aid available to the aluminium, zinc and copper industries, said a copy of the paper obtained by Reuters on Friday. The 40 million euros would be available in 2009 to stop non-ferrous metals plants closing in the economic slowdown, the document said. Details still needed to be worked out. The Neuss plant has capacity to produce 230,000 tonnes of primary aluminium annually but was producing only about 4,000 tonnes a month or about 50,000 tonnes on an annual basis, Steffen said. Only 102 of the plant's 474 production furnaces were now working and production could still stop at the end of June. "The decision remains in force to keep the plant open until the end of June at the latest," he said. More than 500 jobs could be threatened by closure of primary aluminium output at Neuss. Hydro has said German electricity costs are up to 50 percent higher than in other west European countries.

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