Rio Tinto blames carbon tax for the closure of UK smelter

Marion Dakers
RIO TINTO yesterday said new environmental taxes and red tape were partly to blame for the closure of its Lynemouth aluminium smelter in Northumberland, risking 600 jobs.

The mining giant said the smelter “is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation”.

It is thought that the coalition’s controversial plans for a carbon price floor, announced in the 2011 Budget, are being blamed alongside EU emissions trading and large combustible plant rules.

Earlier this month, the lobby group Energy Intensive Users Group said Rio Tinto was among dozens of firms asking the government for some relief from the carbon price rules.

An agreement has not been made in time for Lynemouth to remain open, though a government “support package” is due before the end of the year.

“The government recognises the need to support energy-intensive industry,” said a Treasury spokesperson yesterday.

Aluminium prices have slumped in recent months, making it difficult for producers to stay profitable.

There is some hope that the plant could reopen under new owners, and Rio Tinto said it is in exclusive discussions with a possible buyer.