PARIS -(Dow Jones)- The location of future aluminum production will continue to be driven by the availability of cheap energy, senior industry executives said Thursday.
Jean-Philippe Puig, president of primary metal for Europe Middle East and Africa at Rio Tinto Alcan, said the aluminum market continues to face a scarcity of energy and this is making regions like Canada and Iceland--abundant in hydro-electric energy--and the Middle East preferred locations for new smelters.
Europe and China are losing out as a result of high energy costs.
"The energy issue is getting more and more difficult as the size of smelter projects grows," he said.
The first deputy chief executive of United Co. Rusal, Vladislav Soloviev, meanwhile said that cheap energy is key but that there are "not a lot of places in the world that we can find it."
Both executives noted rising cost pressures from other raw materials like coke, used to make aluminum.
Aluminum is a very intensive production process, accounting for at least a third of total output costs.
The executives were speaking at a Metal Bulletin conference in Paris.