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New owners of smelter plan to start steel production in near future

The Lochaber smelter at Fort William
The Lochaber smelter at Fort William

Steel could be produced in the Highlands as part of ambitious expansion plans for the UK’s last aluminium smelter.

The £330million sale of Rio Tinto’s Alcan plant to Liberty House and SIMEC – both members of GFG Alliance – was marked yesterday by the visit of First Minister Nicola Sturgeon to the Fort William site.

And GFG Alliance executive chairman, Sanjeev Gupta, revealed that his “dream” was to diversify into steel production there within the decade, and help create up to 2,000 jobs.

The new owners have already pledged to save the existing 170 jobs at the plant and create another 300 through a £120million investment in equipment and establishing an aluminium wheel manufacturing facility at the site. Hundreds more jobs would be created through the supply chain.

Yesterday, Mr Gupta said the aim was to start work on the new factory by summer next year and have it ready for production one year later.

Mr Gupta, who said the investment at the Lochaber site was GFG’s “most significant” in the UK to date, added: “Hydropower is the anchor to this and it will be around for centuries to come. The first phase is the alloy wheels plant which creates about 300 jobs and many more directly. My dream is still to make liquid steel in Scotland and this is the first opportunity.

“What’s changed in the UK is primary steel production, which is based on imported iron ore but we have the opportunity of steel scrap, where it starts to come to the end of its life, and we would like to recycle that in the UK itself and believe we can make enough steel as it’s sustainable.

“I think we are at a turning point in the UK in terms of industrial strategy and here in the Highlands I believe will be a turning point.”

During her keynote speech yesterday, Ms Sturgeon said: “This is a big vote of confidence in the Highlands and in Scotland. We have a company that sees the potential not just as a smelter as it is, but of the manufacturing possibilities in the Highlands.

“I’d also like to thank those who work in the smelter. I know for you and many people whose lives and livelihoods depend on this, there has been the uncertainty which has made the past year feel like a lifetime. But it is because we understand the importance of this facility to the Highland economy that Scottish Government and HIE were determined to do everything we could to secure this smelter.”

The new deal includes the hydroelectric station and aluminium smelter at Fort William, the neighbouring hydro-plant at Kinlochleven and more than 100,000 acres of estate land which hosts the water catchment area.

Liberty – under the banner “Liberty British Aluminium” – will operate the smelter and new engineering and downstream manufacturing facility, while sister firm SIMEC will operate the hydro plants.

Allan MacKinnon, site worker of 40 years, said: “It’s great news in my view, not just for the plant but the area as well. It was a worrying time wondering whether out jobs would be safe, but they kept us informed regularly. We don’t quite know what’s going to come in now but the change is good and it will get a bit more interesting.”

Charlotte Wright, interim chief executive at Highlands and Islands Enterprise (HIE), said: “We were in contact with Rio Tinto Alcan throughout their strategic review and supported their efforts to secure a sustainable future for the Lochaber operations.

“Both SIMEC and Liberty have expressed clear commitment to the area in retaining and potentially creating employment and boosting the local economy. We very much welcome this and look forward to working with them on their plans for the future.”

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