According to an announcement, Rio Tinto had invested about Eur80 million for its aluminum plant located in Dunkirk in the past one month and a half. It said the mining firm would again be investing nearly the same amount in the next five years focusing on energy saving and efficiency upgrades for its operations.
The mining firm operates the biggest aluminium plant in the European Union, producing 286,600 tons in 2012 alone. As a result, Dunkirk is the single biggest end user of electricity in France with an hourly demand of 485 megawatts per hour.
To cover the said electricity demand, Rio Tinto has a 25 year contract for electricity supply with EDF, the French utility firm. This though would be ending by 2016 and as the plant's electricity bill is 23% of its overall production cost. Without the deal, the cost of electricity in overall production expenses can rise to 80%, factoring in current prices.
It is for this reason why Rio Tinto is putting a premium on efficiency in order to avoid the heavy weight of the increase. Alongside this is the negotiations with EDF for an extension or a new contract altogether.
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