* Glencore to shortly send letter of intent to buy Alcoa
* Plant's closure could risk the jobs of 500 direct
By Lisa Jucca and Francesca Piscioneri
MILAN/ROME, Sept 19 Swiss commodities trader
Glencore is expected to present a letter of intent to
buy U.S. aluminum maker Alcoa's Italian plant in coming days as
the Italian government redoubles efforts to find a buyer for the
"Glencore has committed to present a letter of intent to
Alcoa within 10-15 days," said Alberto Pili, an official at the
Carbonia-Iglesias province where the Alcoa plant is located.
Alcoa, the largest U.S. aluminium producer, has decided to
close down its plant in Sardinia, a move that puts at risk the
jobs of 500 direct employees.
Its closure would be a heavy blow for the Mediterranean
island which has a 15 percent unemployment rate, well above the
Alcoa, which has decided to move part of its production in
Italy, Spain and other countries to a big new plant in Saudi
Arabia, has scheduled final closure of the smelter by year end.
Alcoa has committed to keep the plant ready to be restarted
for a year after closure.
Earlier on Wednesday the government met with Glencore and
regional representatives to discuss energy costs at the plant,
one of the main reasons it has found it difficult to compete
with global rivals.
On his way out of the meeting Sardinia President Ugo
Cappellacci said he was hopeful for an offer by Glencore within
"The government has provided a guarantee, requested by
Glencore, to keep the power price at 35 euros (per megawatt
hour) over 15 years," Pili said.
At the beginning of September the government wrote to
Glencore to reassure it on power discounts for 15 years if it
decided to buy the plant.
"If a solution can be found that benefits all parties, than
Glencore would look to help," a source close to the company
A price of 35 euros/MWh would be significantly below the
approximately 70 euros/MWh power would cost without subsidies
but there are concerns it could be construed as state aid.
The EU Commission has previously asked Italy to recoup aid
from favourable power tariff schemes.
Besides Glencore, Swiss industrial group Klesh and Italian
wind power group Kite Gen Research have previously expressed an
interest in the Sardinian plant.
But Kite Gen founder Massimo Ippolito told Reuters on
Wednesday that an acquisition of the plant was not his company's
Kite Gen, which makes wind power technology, is ready to
build a 300 megawatt wind farm close to the smelter to help
power what is the biggest single corporate energy user in Italy.
"Alcoa sent us a very positive letter and is interested in
our project. We have an appointment soon," Ippolito said.