Aluminium Dunkerque retrenches aluminium production for Europe’s rising energy cost

Aluminium Dunkerque, the biggest aluminium smelter in France previously owned by a unit under GFG Alliance, has decided to curtail production by one-fifth of its capacity to battle rising energy prices in Europe, as was reported by an internal source.

The new authority, private equity firm American Industrial Partners (AIP), will utilise this strategy until the beginning of 2023. The equity firm took over the smelter after the previous owner was charged with a debt default.

Just like Aluminium Dunkerque, other European aluminium or metallurgical organisations have decreased their production rate, unable to balance the augmenting energy prices with the net cost of their finished products.

Aluminium Dunkerque is situated near the northern French port of Dunkirk, boasting of being Europe's biggest aluminium production area with an annual capacity of about 285,000 tonnes. The enterprise reports an employee count of more than 600 specialists.

Though the company was not immediately available for interviews, noises are it might shut down fifty-four smelters out of a total count of 264 tanks that apply electrolysis to produce primary aluminium.

The smelters utilise almost the amount of energy needed to power up France's second-largest city, Marseille, and electricity alone consumes one-third of the production cost allotted by the company, the source identified.

Preferential tariffs suffice the maximum cost related to energy under a French nuclear power scheme. Yet Aluminium Dunkerque has been toiling with energy prices for a long time for the portion of its work where it needs to outsource power.

The organisation is also trying to sign a power contract with the state-owned utility EDF for a longer period of time. The smelter had curtailed production by 15 per cent last winter owing to a then sudden rise in electricity cost.