Rio in Talks With U.K. to Keep Part of Aluminum Smelter Open

Aug. 13 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, is in talks with the U.K. government to keep one production line at an aluminum smelter in Wales open. Maintaining output at the plant’s so-called potline is one of the options under discussion after the Anglesey Aluminium Metals Ltd. unit last month rejected an offer of 48 million pounds ($80 million) in government aid, Welsh office spokesman Andrew Mathias said today by telephone. Rio and rival aluminum producers United Co. Rusal and Alcoa Inc. have shut capacity and deferred projects as demand plunged and stockpiles rose to a record, sending prices to a seven-year low in February. Rio said in January the 148,000-metric-ton-a-year smelter would close in September when its contract for electricity from the nearby Wylfa nuclear power plant expires. Wylfa is due to be decommissioned at the end of next year. Energy accounts for more than a third of aluminum production costs. Rio’s London-based spokesman Nick Cobban said the company is talking to the government over “possible alternative proposals.” The government’s initial rescue package wasn’t sufficient to cover the cost of the power contract coming to an end, Cobban said. Rio owns 51 percent of Anglesey and Kaiser Aluminum Corp. of the U.S. has the remainder.