ECONOMY

Power plant to help AoG with energy costs

LONDON – Aluminium of Grece (AoG), Greece’s only aluminium smelter, is building a 320-megawatt power plant to secure the company’s long-term future, a company spokesman said yesterday. «We are building a co-generation plant of 320 megawatts in order to deal with (high energy costs). It will be a gas-fired plant,» Nick Kontos, investor relations manager at parent company Mytilineos, told Reuters. Mytilineos and related companies own 53 percent of AoG and the firm also has an option on a 7.2 percent stake held by Canadian aluminium giant Alcan «AL.TO.» The rest of AoG’s shares are listed on the Athens Stock Exchange. Rising energy prices could threaten as much as 25 percent of Europe’s aluminium production capacity. «This has to be built for AoG to continue in business. The (electricity) tariffs in Greece are high. Currently we have a special agreement and are paying 22 euros ($26.81) per megawatt hour, but that expires in March 2006. The usual price for industrial units is 43 euros,» Kontos said. «By building the co-generation plant we expect energy costs to be around 30 to 32 euros. Construction started last month and will take approximately 22 months,» he said. Kontos said the company was likely to continue producing at normal levels for the year after its long-term energy contract expired before the new generating capacity came on stream. He said the power plant would cost 200 million euros, but the EU would contribute with a subsidy of 35 million euros. AoG produced 165,000 tons of aluminium and 755,000 tons of the intermediate product, alumina, at its Distomon facility in 2004.