Anglesey Aluminium in Wales is set to close, resulting in 500 job losses.

Anglesey Aluminium Metals (AAM) – a joint venture between Rio Tinto and Kaiser Aluminium – has announced it will end smelting operations at the end of September 2009, resulting in approximately 500 job cuts at its Holyhead site in Wales.

To produce aluminium, AAM uses an electrolytic process that uses large quantities of electricity. AMM’s current power supply contract ends in September and the company has not been able to find an alternative supply for the smelter.

However, the company is investigating whether certain operations can continue past September, including its remelt and casting operations and the production of anodes for use by other smelting facilities.

David Bloor, AAM’s Managing Director, explained the situation: “We have worked hard over many months in our efforts to extend the existing power contract beyond September of this year but have not yet been successful.

“The operation is dependent for its power on the nearby Wylfa nuclear power station which is itself due for closure within the next few years. We are fully  aware of the significant impact on the workforce and on the local community and will work with partners and stakeholders to develop other long term options in line with existing operations, the needs of the local community, and the economic market situation.”

One of the world’s leading mining companies, Rio Tinto, owns 51% of AAM, while Kaiser Aluminium, a leading producer of fabricated aluminium products, owns 49%, along with an investment of $37.6 million as of September 2008.

In a statement, California-headquartered Kaiser Aluminium said: “Neither the curtailment of smelting operations nor the related impairment is expected to require the Company to make future cash investments in Anglesey.”