Premium Electricity to Affect Aluminium Industry
Writes Dan Drage dan.drage@consumerchoices.co.uk
Car and drinks can production look set to become the next victim of rising fuel costs.
Aluminium suppliers are struggling to keep pace with rising energy costs, with the vast quantities of electricity required to engineer the metal crippling the industry.
Aluminium prices, in line with crude oil prices, are anticipated to rise by a third in the next 18 months.
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"single furnaces need the power of 1000 homes to fire them up"
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A typical aluminium smelter consumes as much electricity as a city, and single furnaces need the power of 1000 homes to fire them up. The return on this 1000 home power input is only three tonnes of metal; therefore sites such as Anglesey Aluminium in Wales are Britain's biggest single consumers of electricity.
Higher energy costs could lead to smelter closures in China, which has some of the least efficient and most expensive producers in the world. Similar power crunches have hit production in South Africa, Brazil and New Zealand, and aluminium producers are increasingly looking to areas with large energy supplies. Algeria and Libya have been suggested as prime, as yet untapped sites.
Tom Albanese, chief executive of global miners Rio Tinto, believes access to secure and cheap power is now “more important than ever for aluminium producers”, but environmental campaigners have vocalised their opposition to aluminium production spreading its wings all the way to North Africa.
Aluminium smelting produces about two tonnes of carbon dioxide for every tonne of metal. The huge quantities of electricity used add another 14 tonnes of CO2 to each tonne produced.
Chris Eagle, Commercial Manager at Credit Choices, can see the bigger picture:
“Rising energy costs are going to affect industry sectors sooner or later, but it is now down to the firms who rely on an aluminium supply to consider viable alternatives to this expensively produced and ecologically unsound soft metal.”
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