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Fort William smelter operations continue amid fraud probe

Inside the aluminium smelter at Fort William
Inside the aluminium smelter at Fort William

Management at Fort William aluminium smelter have told the area’s chamber of commerce operations are continuing as normal there following the launch of a Serious Fraud Office (SFO) probe into the activities of is owners, GFG Alliance.

Lochaber chamber chief executive Frazer Coupland described the investigation as “unsettling” and said the plant and its associated hydro power station were a “critical part” of the community.

On Friday, the SFO said it was investigating “suspected fraud, fraudulent trading and money laundering” in relation to the financing and conduct of business at GFG Alliance companies.

The probe will include the group’s multi-billion pound financing arrangements with collapsed lender Greensill Capital.

Firm ‘fully co-operating’

The firm has said it will co-operate fully with the investigation and is “making progress in the refinancing of its operations.”

GFG took over the Fort William smelter in 2016 and operates it through its Alvance aluminium division.  Around 200 people are employed at the facility and hydro plant.

Mr Coupland, said:  “Lochaber’s smelter and hydro power station are a critical part of our Lochaber community, providing skilled jobs while also being central to the wider industrial supply chain in the Highlands.

“I am in regular communication with the management team at Alvance, and whilst the recent announcements are unsettling, the situation locally is that it does not affect operations: the team remain focussed on serving their customers and operating safely.”

The smelter, which is the last of its kind in the UK, was facing possible closure when GFG acquired it and the surrounding 114,000-acre estate for around £330million from Rio Tinto five years ago.

The smelter and hydro power plant.

As part of the deal, the Scottish Government guaranteed to buy power generated by the hydro plant for the next 25 years.

It has since emerged that GFG, which also owns Liberty Steel, leaned heavily on financing from Greensill Capital before the lender collapsed in March.  Greenhill had £3.6billion exposure to the group.

Scottish Liberal Democrat Leader Willie Rennie has demanded answers on how tax payers would be protected from the government’s exposure at the Lochaber smelter.

The Scottish Government has said it is continuing to “monitor developments closely” at GFG.

North development agency Highlands and Islands Enterprise (HIE) said it has not given any money to the group.

Alastair Nicolson, HIE’s area manager in Lochaber, Skye and Wester Ross, said: “We have worked with the company supporting their ambitions in relation to various projects in the Fort William area, but not awarded any funding.”

GFG recently announced plans to expand its operations at the Fort William smelter in a proposed £94m project, which it said would create up to 70 new jobs.

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