The board of directors of the ALSCON aluminium plant in Akwa Ibom State, Nigeria, has announced the immediate suspension of smelting operations at the plant
The plant is 85 per cent owned by Russia's UC RUSAL, the world’s largest aluminium producer, which had been covering the plant's losses as it awaited a sustainable gas supply to be made available to return the plant to its full operational capacity.
As this has not been forthcoming, aluminium production at ALSCON has continued to be a loss-making venture rendering the full utilisation of the existing capacity impossible.
In addition to this, RUSAL cited the on-going attempts to challenge its right of ownership to the plant and the recent decision of Nigeria's Supreme Court to cancel the sale of ALSCON shares to RUSAL.
A company statement from RUSAL said that such steps "impede long-term investment in the smelter" and added that "legal issues relating to ownership renders it impossible to sign long-term contracts, hinders development, obstructs implementation of structural, production, and material improvements, and impedes performance of obligations".
ALSCON will, however, continue to generate electricity and during the current suspension period RUSAL will attempt to secure a continuous gas supply, obtain judicial confirmation that it is the rightful owner of ALSCON and prepare to restart operations.
"The company’s decision will not affect the social stability or standard of living in the region," said RUSAL's statement. "The company is committed to minimising any negative consequences of the suspension for the personnel and local communities of Ikot Abasi, Nigeria, where the smelter is located."
The company added that it would compensate employees who terminate their employment at the plant in accordance with the existing collective agreement and assured all employees residing in ALSCON’s housing estates that they would be allowed to continue living there with full power and water supplies.
"RUSAL notes that the suspension of operations is a temporary measure, one necessary to avoid completely shutting down the plant," said the statement.
"Smelting operations will resume as soon as the legal uncertainty has been resolved and the continuous power supply has been secured."