High energy costs and the rising euro may force Canadian aluminium producer Alcan to close 20 per cent of its smelting capacity in Europe, says Alcan executive vice president Richard Evans.

“We have a number of smelters in Europe that are relatively modern with competitive energy contracts. But there are some older ones and those will be challenged,” the Financial Times quoted Evans as saying.
He said Alcan expected that three out of its nine European smelters, representing 20 per cent of its European capacity of one million metric tonnes a year, would be closed or would change function when their energy contracts came to an end.
He said that the strength of the euro had increased Alcan’s European costs by 30 per cent in local terms and that despite higher aluminium prices, the euro and energy costs were “putting tremendous pressure on France and Germany and forcing delocalisation.”
He said: “Europe’s smelting base is under attack from costs and this could have a major impact on jobs. It devalues the capital that has been invested.”
Alcan acquired French aluminium maker Pechiney in late 2004, creating the biggest packaging and the second-biggest aluminium group in the world.