Italy govt creates fund to offset Aloca, coal mine closures

MILAN Tue Nov 13, 2012 3:46pm EST

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MILAN Nov 13 (Reuters) - The Italian regional and national governments have created a 451 million euro ($573.27 million) fund for the economic development of the area surrounding an Aloca aluminium smelter that is slated for closure at the end of this year.

The Sulcis area, in the south-western region of the island of Sardinia, is threatened with unemployment from the looming closures of the Carbosulcis coal mine, as well as the U.S. aluminium group's smelter.

With more than 1,000 jobs in the area at risk, the industrial crisis hitting the impoverished Mediterranean island of Sardinia is a political hot potato for technocrat Prime Minister Mario Monti as he fights to keep costs down and contain Italy's high debt.

With Alcoa set to leave Italy, the government is looking for a buyer for the smelter, which produces around 8 percent of Italy's aluminium needs.

An Italian junior minister said in October that three companies have expressed interest in the smelter that Alcoa decided to shut due to high power prices.

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