Reuters reported that Swiss commodities trader Glencore has suspended talks with Italian authorities over a possible offer for an Italian plant being closed by US aluminum maker Alcoa.

A union leader and a source close to the talks said that the decision came after the Italian Industry Ministry rejected a request by Glencore this week to provide discounted energy prices if it were to purchase the Italian smelter.

Alcoa, the largest US aluminum producer has decided to close down its plant on the island of Sardinia, putting at risk more than 500 jobs. Alcoa has blamed high power prices in Italy for undermining the competitiveness of the plant.

Glencore, one of 6 companies eyeing the smelter had made any offer conditional on the government being able to guarantee heavily discounted power prices. But talks have so far failed to reach an agreement over the energy costs, raising the pressure on Prime Minister Mario Monti to clinch a deal at a time of austerity and job uncertainty.

In a letter to the Italian industry ministry and the Sardinian governor, Glencore said that it would not continue talks under current conditions. We confirm that in the current situation we are not interested in continuing the talks, considering that the current owner of the plant at the same conditions is accumulating significant losses which have led to the decision of shutting down the plant.

Source - Reuters

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