By Maximilian Clarke
Rio Tinto’s decision to close the Lynemouth Aluminium Smelter and possibly the accompanying power station stresses the government’s need to protect crucial, energy-intensive companies by exempting them from the proposed carbon floor plan, the Confederation of British Industry has said.
The Anglo-Australian mining giant and FTSE 100 company, Rio Tinto (LSE: RIO; ASX: RIO), made the announcement yesterday that the energy intensive plant was becoming unprofitable due to soaring enegy costs and proposed low-carbon legislation.
“It is clear the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation. We are hopeful that the power station can remain in operation under new ownership,” said Jacynthe Côté, chief executive of Rio Tinto Alcan.
Many energy- intensive industries are crucial to the UK economy, and must be protected in order to support jobs and growth, as CBI director general, John Cridland comments”
“This news shows why the Government must act to insulate manufacturers most at risk from the increasing cost of energy legislation. Energy intensive companies make the very products the UK needs to move to a low-carbon economy, and are already being hit by rising energy prices and slower demand.
“The CBI proposes targeting companies most at risk with an exemption from the carbon floor price.”
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