Anglesey Aluminium Smelter - Rio Tinto€¦ · Case study November 2016 ... village, with up to 500...

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Case study November 2016 riotinto.com Anglesey Aluminium Smelter Holyhead, Anglesey, Wales The journey Penrhos Works, the primary aluminium smelter in Holyhead, operated continuously from 1971 until 2009, bringing a newfound prosperity to an area where there had previously been high levels of unemployment. Anglesey Aluminium Metals (AAM), a Rio Tinto-managed joint venture with Kaiser Aluminium, was one of the island’s biggest employers, providing work for up to 570 staff with 70 full-time contractors. There were a number of key factors contributing to the operation’s success. These included its close proximity to the Wylfa nuclear power station, which ensured a relatively economical electrical power supply. The deep-water port provided a point for bringing in raw materials (coke and alumina), and a 3km conveyer belt was built to link the port to Penrhos Works. The Works produced up to 145,000 tonnes of aluminium per year, but the impending closure of the power station sealed the smelter’s fate. Despite the best efforts of AAM and union and government representatives, they were unable to secure another commercially viable power contract. In September 2009, smelting operations ceased with the loss of 400 jobs and decommissioning began in October 2010. Part of the Penrhos site went on to become a remelt facility supplying over 81,000 tonnes of aluminium billet per year. The operation employed almost 100 people until it, too, was decommissioned in 2013 due to the cost of raw materials. In addition to the principal buildings at Penrhos Works, there were a further 47ha of brownfield land suitable for development. The larger land holdings comprised an 87ha coastal park and 137ha of farmland. Two ambitious eco projects supporting tourism, manufacturing and housing will bring over 1,000 jobs to a former smelter site and its surrounding land. The project is testament to a dedicated team effort to identify suitable partners to transform the property. The former smelter: a prime site for redevelopment.

Transcript of Anglesey Aluminium Smelter - Rio Tinto€¦ · Case study November 2016 ... village, with up to 500...

Case study November 2016riotinto.com

Anglesey Aluminium SmelterHolyhead, Anglesey, Wales

The journeyPenrhos Works, the primary aluminium smelter in Holyhead, operated continuously from 1971 until 2009, bringing a newfound prosperity to an area where there had previously been high levels of unemployment. Anglesey Aluminium Metals (AAM), a Rio Tinto-managed joint venture with Kaiser Aluminium, was one of the island’s biggest employers, providing work for up to 570 staff with 70 full-time contractors.

There were a number of key factors contributing to the operation’s success. These included its close proximity to the Wylfa nuclear power station, which ensured a relatively economical electrical power supply. The deep-water port provided a point for bringing in raw materials (coke and alumina), and a 3km conveyer belt was built to link the port to Penrhos Works.

The Works produced up to 145,000 tonnes of aluminium per year, but the impending closure of the power station sealed the smelter’s fate. Despite the best efforts of AAM and union and government representatives, they were unable to secure another commercially viable power contract. In September 2009, smelting

operations ceased with the loss of 400 jobs and decommissioning began in October 2010.

Part of the Penrhos site went on to become a remelt facility supplying over 81,000 tonnes of aluminium billet per year. The operation employed almost 100 people until it, too, was decommissioned in 2013 due to the cost of raw materials.

In addition to the principal buildings at Penrhos Works, there were a further 47ha of brownfield land suitable for development. The larger land holdings comprised an 87ha coastal park and 137ha of farmland.

Two ambitious eco projects supporting tourism, manufacturing and housing will bring over 1,000 jobs to a former smelter site and its surrounding land. The project is testament to a dedicated team effort to identify suitable partners to transform the property.

The former smelter: a prime site for redevelopment.

Case study November 2016riotinto.com

The transformationAAM was determined to ensure that its property would be redeveloped to rejuvenate the local community, promote Anglesey’s economy and create a sustainable legacy for generations to come. The company recognised that the site, with its extensive landholdings and picturesque coastal location, could attract diverse new investment to the island.

A small team of AAM employees stayed to manage the decommissioning process and facilitate plans for the development of the landholdings. The team worked closely with the Welsh national and local government, and communities in Anglesey, to identify two suitable partners, who were proposing innovative and ambitious manufacturing and tourism opportunities. Throughout the subsequent transitional phase, the AAM team worked intensely with the companies proposing to redevelop the site and surrounding land to ensure that the projects were both sustainable and viable. As a result, two distinct yet symbiotic projects are now under way.

Firstly, a 299MWe biomass power station and an Eco Park will be built on the former smelter site. It will use many of the existing buildings and take advantage of the jetty and conveyor tunnel to bring raw materials directly to the site. The developer, Orthios, will provide “green” electricity for the UK power grid. Using some of this power, and wastewater from the biomass plant, they will develop specialised, hydroponic and aquaculture facilities to produce vegetables and over 8,000 tonnes of

fish annually to sell locally and nationally. There are also plans to build a food-processing centre on the site, along with a facility producing compostable food containers.

The second developer, Land and Lakes, is planning a sustainable tourism, leisure and housing venture on large portions of the outlying AAM land. This development will be in three separate components:

• East of the AAM site at Penrhos will be a holiday village, with up to 500 lodges and cottages accommodating approximately 1,700 people. It will have a range of sports and leisure facilities including an indoor subtropical waterpark, spas and saunas, cafes and bars, a farmers’ market to promote local produce, restaurants, children’s play areas, cycle routes, and coastal and woodland trails.

• South of the AAM site at Cae Glas will be 315 lodges, a restaurant/canteen facility, bars, and sports facilities such as an indoor gym, five-a-side football pitches, running trails and an outdoor lake. This will initially be used to accommodate up to 2,000 construction workers during the building of a proposed new nuclear plant, 20 kilometres away. The accommodation will eventually be refurbished as an extension to the Penrhos holiday village for a further 1,300 guests.

• West of AAM at Kingsland, a large housing development is being planned, with up to 360 houses, half of which will be designated as affordable housing. It is also anticipated that financial contributions will be made if additional school, medical and other community facilities are needed.

There are many synergies between the two projects, the most evident being Orthios’s intention to provide hot water from the power station for the Land and Lakes tourism, leisure and housing venture.

The public will continue to have access to 73 acres of managed amenity and woodland at Penrhos, and to the coastal path and beach. A dedicated car park and visitor centre will be added.

Cellroom decommissioning.

Plans for Penrhos holiday village.

Case study November 2016riotinto.com

The developments by Orthios and by Land and Lakes will provide a major and sustainable boost to the local economy. Together, the projects are estimated to create around 1,000 jobs, which far outstrips the number of roles at the fully operating smelter.

The projects are expected to generate around £6 million per year in wages and salaries, and it is estimated that the leisure village will add approximately £40 million into the local economy. A major benefit of the Land and Lakes developments is the reduction in the seasonal nature of the region – and the shift towards higher-value tourism for Anglesey. The estimated 150,000 guests per year will provide an enormous boost to surrounding local attractions and facilities.

The biomass power plant has potentially huge benefits for the local community. It will produce waste heat and wastewater that can be used to heat local homes and offices, alongside the aquaculture and hydroponics facilities on site. When fully operational, it is estimated that this demand will only amount to around two per cent of the power produced; the rest will be sold to the national grid.

Strong relationships formed between AAM and the major stakeholders, which proved to be extremely constructive to the closure process.

The existing deep-water jetty has served as a berth for large cruise liners since 2009. It is a tourism opportunity that was not possible when smelting was under way at AAM, but now allows around 13,000 cruise passengers to visit Anglesey every year, helping to support the local economy.

HighlightsStrong relationships formed between AAM and the major stakeholders, which proved to be extremely constructive to the closure process.

Twenty ex-AAM employees were re-employed to work alongside a small management team to carry out the decommissioning of the site. The team already knew the smelter well, and were trained to perform the tasks needed once operations had ceased. This not only helped the decommissioning process but also equipped these people with new skills to take with them after the work had been completed.

The decommissioning process was carried out with careful attention to minimise waste. The aim was to reduce the amount of material sent to landfill, and to reuse, recycle or recover as much as possible instead. Alternative locations were sought for the decommissioned materials both in the UK and abroad, following all duty of care obligations, and strict health, safety and environmental controls. By the end of the decommissioning process, less than five per cent of the waste had been sent to landfill.

Cruise ships now use the smelter’s deep-water jetty.

Donation to a local community group that provides skills training to teenagers.

Case study November 2016riotinto.com

meeting UK government expectations for regional redevelopment, through to accounting for a local breeding programme for the endangered red squirrel. Each issue has been given full attention and, ultimately, overcome.

Several aspects of AAM’s success story are transferable (and indeed, were adopted at Rio Tinto’s Lynemouth site when it was closed). Most notably, the concept of re-employing members of the original workforce to do the bulk of the decommissioning work, benefitting from their existing skills and knowledge, and providing them with further training where necessary that, in turn, would be useful for life after closure.

Classifying the decommissioned smelter as a brownfield site was a major game-changer, which allowed for more inspirational and innovative redevelopment projects.

Finally, a key transferable lesson was recognising the value of “waste”. By reappraising many of the materials that were originally classified as waste (and often carrying high disposal costs), the team was able to tap into new markets and sell the materials instead. Ultimately, the efforts generated value for the business and dramatically minimised the amount of waste sent to landfill.

Many of the team have a long history of working at the former smelter. Their deep connection to the site has helped to strengthen their resolve in seeing the regeneration phase through to a successful outcome.

A small fabrication company, comprising a number of ex-AAM employees, has set up a metalwork venture in an old engineering workshop on site. This business has gone from strength to strength and is set to expand further as the team works with the new site owners to develop the infrastructure necessary for the Eco Park project.

Lessons learntThe regional development team at Anglesey has been on an enormous journey, exploring many options for the future of the site. It would have been possible to simply sell the site and walk away, but by upholding Rio Tinto’s closure principles, they have developed an outstanding new use for the site.

Many of the team have a long history of working at the former smelter. Their deep connection to the site has helped to strengthen their resolve in seeing the regeneration phase through to a successful outcome.

Obstacles to finding a suitable new use for the site have come in many guises and many sizes – ranging from

An artist’s impression of the biomass power station; work at which commenced in July 2016.

A plan of the boiler buildings and biomass stores.

Our vision

We aim to ensure that our former operating sites are made safe, that all problem areas are addressed cost-effectively, and that there is a sustainable socioeconomic future for the community together with a minimised aftercare burden.