Italian industry body Centroal said that the competitiveness of Italy's aluminium alloy and metalworks industries will be hit if US aluminium giant Alcoa Inc closes its Portovesme smelter on the island of Sardinia.

Alcoa said it planned to close the smelter, cutting a 150,000 tonne annual production capacity, and slash output at two Spanish smelters as it takes aim at its high-cost European operations.

Centroal in a statement said that "Loss of the only national producer of primary metal, even if it is not sufficient to cover all Italy's needs, makes the transformation sector totally dependent on foreign producers, almost all of whom are from outside the European Union.”

Centroal said that Italy's aluminium industry will be weakened by Alcoa's move, because it will lose control over primary metal production, which is essential for making new alloys for new applications.

It said that Alcoa's decision to cut operations in Italy and Spain is a direct consequence of the lack of a long term European industrial policy, which has already led to disappearance of a major part of primary metal production (aluminium, lead, zinc, copper) from Europe in the course of 10 years.

Centroal said that the metals industry, a huge electricity consumer, needs access to raw materials and energy at prices comparable to those of international rivals to remain competitive.

(Sourced from Reuters)