Hydro May Shift German Aluminium Plant to Recycling

HAMBURG, Sept. 15 -- Norwegian group Norsk Hydro (NHY.OL) may convert its troubled German aluminium plant from a producer of primary metal to a recycling unit, CEO Svein Richard Brandtzaeg said in comments published on Wednesday.

Norsk Hydro said in April it may close Neuss, Germany's largest aluminium smelter, because of high German power costs. In January 2009 Norsk had said it was cutting aluminium output at Neuss and was reviewing its future.

The company was now considering converting primary aluminium production at the 230,000 tonnes annual capacity plant into metal recycling, Brandtzaeg said in an interview with German regional daily Rheinische Post.

This could mean only 200 of the plant's 730 personnel would keep their jobs, he said.

It would also mean that extra aluminium would have to be imported from the group's other plants in Europe to support its large German aluminium rolling operations in Grevenbroich, he told the newspaper.

Brandtzaeg said Neuss had only produced about 50,000 tonnes of aluminium in 2009 or about 80 percent down on the year. The plant had made peak losses of about 300,000 euros daily.

"Electricity costs in Germany are about double as high as the world average," he told the newspaper.

Power represented about 50 percent of the Neuss plant's costs.

"We can continue to hold the situation in Neuss for a couple of months," he said. "But something must be done."

He urged the European Union Commission to approve a request for the German government to allow power-intensive industries to receive a special reduction in their carbon dioxide emission costs.

"We are still hoping but I am now starting to become sceptical," he said.