Third buyer interested in Alcoa Sardinia smelter

MILAN Wed Sep 12, 2012 5:29pm IST

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MILAN (Reuters) - Italian wind power group Kite Gen Research has become the third group to express interest in U.S. aluminum maker Alcoa's (AA.N) Sardinian smelter, which is in the early stages of being closed.

Workers at the plant have staged demonstrations that have turned the smelter into a national symbol of Italy's recession.

"We have sent an offer to (Industry Minister Corrado) Passera and (Prime Minister Mario) Monti and are waiting for a response," Kite Gen founder Massimo Ippolito told Reuters on Wednesday.

Swiss industrial group Klesh and London-listed commodities trader Glencore (GLEN.L) have previously expressed interest in the plant, which will be closed by November 30 if no buyer is found.

Alcoa reiterated on Wednesday it "has not received any expressions of interest that are viable or different to those previously considered", and also repeated that while it will continue with "the curtailment process", it remained open to discussing the sale of a curtailed plant.

Kite Gen, which makes wind power technology for high-altitude use, said it would build a 300 megawatt wind farm close to the factory to help power what it said was biggest single corporate energy user in Italy.

The cost of energy is one of the main reasons the Sardinian plant has found it difficult to compete. Italy has asked the European Union if the plant would be able to use special interruptibility contracts to lower its power costs.

Ippolito said funding for the operation would come in part from carbon emission certificates. "By using renewable energy the plant will not need to buy carbon credits to offset its polluting effect and indeed will be able to sell the credits it has on the market."

Ippolito also said Kite Gen had asked the government to apply for EU funds of 1.3 billion euros ($1.7 billion) available for innovative projects.

Alcoa's factory supports about 1,500 jobs in Sardinia. Its closure would be a heavy blow for the Mediterranean island which has a 15 percent unemployment rate, well above the national average.

Italy is beset by growing joblessness as the economic crisis bites hard. At the end of July, the industry ministry was mediating in 131 other disputes involving companies seeking to cut jobs.

(Reporting by Stephen Jewkes; Editing by Dan Lalor)