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Power contract talks for HAW terminated

July 12, 2005, 19:00 CEST

Talks to explore further options to reach an agreement for electricity supplies to Hamburger Aluminium-Werk (HAW), between HEW/Vattenfall and HAW, have been terminated without result. The representatives of the owners of HAW and HEW/Vattenfall reached this conclusion during discussions with Hamburg economics senator Gunnar Uldall.

Due to basic policies governing the German energy market, and now also the extremely tight carbon emission trading system resulting in high prices for CO2 emission certificates, the parties could not find a common ground allowing continued operations of primary aluminium production in HAW. The outcome of the talks thereby confirms the closure of the electrolysis plant and anode production, affecting approximately 450 employees. The three owners of the plant - Alcoa, Amag and Hydro - decided in June to close the main units in the plant by the end of 2005, if new power supply could not be arranged at competitive terms.

Hans-Jürgen Cramer, managing director of HEW/Vattenfall, underlines the influence of government imposed taxes and fees on power prices in Germany. "Costs decided on a federal level in Germany, like eco-tax and the financing of the wind power, drive the prices up and lead to international competitive disadvantages for the German industry. We, as power suppliers, cannot solve this problem – this is a political issue," states Cramer. "The outcome of the talks is that we see no sustainable solution and that there is no basis for further discussions."

"In spite of constructive efforts by all parties involved, we could not match the different needs of price and supply conditions," says Dieter Braun, head of Hydro Aluminium Deutschland. He has represented the three HAW owners in the talks with HEW/Vattenfall and the Hamburg Senate. "We now urgently need a German and European energy policy more in line with international conditions, to avoid a delocalization of energy intensive industries from Europe."