Case study November 2016riotinto.com

Lynemouth Aluminium SmelterNorthumberland, England

The journeyThe Lynemouth aluminium smelter began operations in 1972, taking advantage of the abundant supplies of locally mined coal, its proximity to port facilities and the availability of a workforce with a long industrial heritage. It had the capacity to produce up to 180,000 tonnes of primary aluminium annually. Both the smelter and the associated coal-fired power station were connected by freight railway to a ship unloading facility at Blyth. Beyond the immediate operational site, Lynemouth also comprised 1,785ha of mainly arable land in south-east Northumberland.

A combination of spiralling energy costs, EU environmental legislation and market fluctuations in metal prices led to the operations being uneconomical. In March 2012, after a period of strategic review and consultation with employees, hot metal production ended at the site. Decommissioning work began in mid-2012 and Rio Tinto’s Regional Economic Development team focused on developing a lasting positive legacy for the site by attracting new investment and supporting local communities.

The Lynemouth smelter was the largest private sector employer in south-east Northumberland and one of the largest in the region; an area that had already experienced a decline in traditional industries. The smelter and power station directly employed 650 and supported an estimated further 3,000 indirectly. The site’s closure, therefore, was likely to have a major economic impact in the region.

In an area with a rich industrial heritage, a former aluminium smelter attracts new industries to its redeveloped site, capitalising on the region’s highly skilled workforce and excellent transport links.

The Lynemouth estate included vast areas of farmland in the north of England.

Case study November 2016riotinto.com

The transformationThe former aluminium smelter site is now home to a range of industrial activities, operating autonomously, but under the umbrella of the site’s new landlord, Harworth Estates. The power station was sold to RWE, operating with the existing workforce and with the ambition of transforming into a biomass plant. The portfolio of agricultural land, which includes farm buildings, 19 homes and a 13-turbine wind farm, has been sold to the Crown Estate. Further parcels of land have been gifted for a range of community and environmental purposes.

The decommissioning process was challenging and complex. The first area to be demolished, cleaned, and prepared for new opportunities was the carbon plant. The potrooms - where aluminium was produced in structures called pots by a process of electrolytic reduction - were to remain for the new owners. They required removal of the pots themselves, removal of the associated asbestos and a major cleaning of the building. It was a 40-week project and, to ensure the safety of every team member, only one activity was carried out in any one building at a time.

Finding a responsible investor for the site was paramount to Rio Tinto. At one stage there was pressure to sell the entire plant (and power station) to a single buyer, in order to safeguard jobs. The potential investor did not have the credentials to ensure the best outcome for the site, so alternative owners specialising in long-term sustainability were sought.

Working in partnership with organisations and individuals focused on regeneration has been critical to Lynemouth’s story. The Regional Economic Development team worked closely with local politicians, Northumberland County Council, economic development organisations (such as the North East Local Enterprise Partnership and Arch Northumberland), the voluntary sector, academia, the UK government (UKTI – UK Trade and Investment; Department of Business, innovation and skills) and other interested parties. It was essential to ensure that they promoted the site and all of its credentials to potential investors with credible and sustainable business plans.

Rio Tinto continued to support the community after closure through a series of donations towards initiatives that aim to leave the community stronger and more self-sustaining long into the future.

Working in partnership with organisations and individuals focused on regeneration has been critical to Lynemouth’s story.

HighlightsThe Lynemouth smelter and the immediate surrounding land is, at 42.5ha, one of the largest brownfield development sites in the north-east of England. The service road, rail and connection to a port – in addition to the site being close to a major motorway and regional airport – made it a high quality investment/development opportunity.

More than 90 per cent of the materials generated through decommissioning and demolition on the existing site has been reused or recycled.

Whilst no one wanted to see Lynemouth operations close, the key stakeholders have been actively engaged in the closure process. They have been understanding of the difficult situation and supportive of Rio Tinto’s ambitions post-closure.

The new landowners of the farming portfolio, the Crown Estate, are well known for their responsible approach to land stewardship. Similarly, the new owners of the smelter site, Harworth Estates, have a strong reputation in sustainable regeneration of brownfield sites.

A legacy fund has ensured that the benefits the plant brought to communities will be felt long after production ended. The fund’s selection criteria placed a priority on projects that were aligned with Rio Tinto’s own sustainable development policy, and a broad range of projects have been supported.

1,600 tonnes of residual dust was removed from the potrooms by dry vacuuming.

Right: The decommissioning team adopted a method developed at Rio Tinto’s Anglesey Aluminium site to address problems with high vibration levels when cutting the busbar.

Case study November 2016riotinto.com

tool in managing the closure. It meant that the announcement was expected and, to some degree, prepared for.

The closure team took a structured approach to the closure process. This encompassed a baseline analysis of the site and its potential future uses; a study of the local social and economic issues; a thorough stakeholder engagement process; and a marketing and communication programme.

Many of the “waste” materials could be used at other aluminium smelters. With early engagement there was a good success rate in reusing materials within the industry, but this was not easy to achieve. With a more coordinated effort within the business, the sharing of materials could have significant savings.

The value created from scrap and equipment sales, combined with good budget management and asset sales, offset the £89m closure provision by more than £7m. Scrap sales from the site are expected to continue to the end of 2016 and will further contribute to the net profit being realised from the decommissioning of the site.

The Lynemouth operations could have been sold on the day it closed to companies interested in asset-stripping the site. Rio Tinto opted to do this themselves to ensure that it was carried out responsibly and attention was paid to the regional economic development programme.

Working in partnership with a wide range of stakeholders, all interested in seeing the successful regeneration of the site, has been critical to ensuring Lynemouth’s sustainable future.

Rio Tinto had a particularly successful partnership with Arch Northumberland, a development company wholly owned by Northumberland County Council with a focus on economic development and regeneration. Arch was able to attract funding from the government’s Regional Growth Fund to give to local businesses for capital projects and apprenticeships. Rio Tinto sponsored two Regional Growth Fund development officers for three years.

Lynemouth Smelter employed hundreds of local people for more than 40 years. Since the announcement of the closure, Rio Tinto worked hard to mitigate the impact of redundancy on the highly-skilled Lynemouth workforce by providing a full and varied package of outplacement support. The majority of the workforce have since been either redeployed or have found new employment. A number of them have also set up their own businesses, building on Rio Tinto’s support.

Lessons learntAs with all of Rio Tinto’s operational sites, Lynemouth was required to prepare a “life cycle plan” and this subsequently proved to be an important and useful

H-Mix has invested more than £400,000 in the construction of a new building from which it will supply ready mix concrete to fellow tenants at the site and locally.

New tenant, Lynx Precast, produces precast concrete flooring systems for the UK construction industry.

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.