Freak weather forces smelter shutdown

Alcan is to shut a production line, reducing aluminium output by at least 40,000 tonnes

A power shortage prompted by freak weather patterns has forced one of the world's biggest metal firms to axe more than $60m of aluminium production.

Alcan can only restore full production if conditions in the spring of 2001 are closer to the historical pattern

Company statement

Alcan Aluminium, which produces metal for making beer cans, car parts and photocopier drums, has blamed an "acute shortage of water" for a decision to mothball a production line in Canada from January.

Low reservoir levels have left a hydo-electricity station Alcan runs to power smelting plants with insufficient water to operate at full capacity.

The Montreal-based firm, the world's second-ranking aluminium producer, in September suspended power deliveries to two companies also fed from the generation plant.

After two months of negotiations with one of the affected firms, Alcan has said "it has been unable to find a solution that would keep the smelter operating at full capacity".

The announcement, which will cut Alcan's aluminium production by at least 40,000 tonnes, helped prices of the metal reach their highest levels since August in trading in London.

And analysts said the metal, which rose $33 to $1,626 on Monday, could soon break the year high of $1,724 a tonne.

'Really strange'

Alcan said the shortage of water in the Nechako Reservoir, which feeds the hydro-electricity plant, followed low snowfall in surrounding mountains 1998 and 1999, and a freak spring this year.

We had a really strange thing happen. Spring was really late

Kathleen Bourchier, Alcan spokeswoman

"We had a really strange thing happen," company spokeswoman Kathleen Bourchier told BBC News Online.

"Spring was really late. It did not really start to warm up until late June."

The reservoir was left without the spate in April and May which usually recharges it.

And, when snow did melt, the summer sun evaporated off much of the water which in normal years would trickle into surrounding rivers, Ms Bourchier said.

Climate change

Alcan warned that further unusual weather might force it to delay reopening the production line.

"Alcan can only restore full production if conditions in the spring of 2001 are closer to the historical pattern," a company statement said.

But, while many governments and firms have warned that emission of pollutions are affecting weather patterns, Alcan dened the water shrotage was evidence of climate change.

"We have records going back 50 years," Ms Bouchier told BBC News Online. "The last 20 have been a little drier, but well within the average range."

Welsh closure

Alcan, which employs 53,000 people in 37 countries, last week announced the closure of its aluminium foil plant near Newport in Wales in June 2001, with the loss of 220 jobs.

The firm, which will retain sheet metal operations at the site, blamed the closure on competition from Russia, China and Continental Europe, and the strength of sterling against the euro.