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Metals Giants Warn Power Crisis Could Derail Europe's Green Push




  • In Business
  • 2021-09-24 04:00:01Z
  • By Bloomberg

(Bloomberg) -- A group representing some of the world's top metals producers warned European politicians that the energy crisis threatens to derail the region's green push and force producers to relocate.

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Eurometaux, whose members include Glencore Plc, Rio Tinto Group and Norsk Hydro ASA, sent a letter to the European Commission as surging power prices prompt companies to curb production. It urged further support for the sector, including ensuring emission-allowance prices don't rise too high and more flexible state aid guidelines.

Zinc producer Nyrstar NV said Thursday that it's curtailing output at a major Dutch plant during peak times of day, highlighting how the spike in power prices is jeopardizing metal supply. For regional aluminum producers, electricity costs could equate to as much as 2,000 euros ($2,345) a ton, about 80% of the commodity's overall price, Eurometaux said.

"If electricity remains too expensive, it will disincentivize industrial electrification as a decarbonization route, undermining the EU's Green Deal objectives," Eurometaux Director-General Guy Thiran and Boliden AB chief Mikael Staffas said. "If front-runner industries like ours cannot stay competitive and survive this decade, it will be a major disincentive for other sectors."

The global energy crisis can still be eased before winter as high gas prices prompt users to seek cheaper alternatives or even cut consumption, Glencore said. There's likely to be more demand destruction this winter if the situation continues as it is, Alejandro Sanchez Gestido, the company's global head of liquefied natural gas, said Thursday.

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©2021 Bloomberg L.P.

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