Sky-high energy prices destroying European industry, warns metal giant

Telegraph

2 days ago

Soaring energy prices will destroy what little heavy industry Britain and the EU have left, the boss of a metals giant has warned ahead of its London listing on Monday.
Evangelos Mytilineos, the chief executive of Metlen, a Greek energy and metals company, has marked his company's new FTSE 100 listing with a dire warning about the disastrous impact of high energy costs.
'The UK and Europe have entered a period of high energy prices compared with our competitors,' he said.
'Countries like China, the US and others have maybe half or a third of the cost of power than we have, and this is the biggest problem for UK and European productivity going forward.
'A lot of [UK and European] companies are moving their plants to other parts of the world.'
Mr Mytilineos cited German chemical giant BASF's 2024 decision to shut down 11 chemical plants in Germany and spend €10bn (£8.7bn) on a new mega-plant in southern China – partly linked to energy costs and green regulations.
The Greek executive, who is also president of the European Metals Association, said the UK and Europe were fighting to retain the factories they had.
'A decade ago Europe had maybe 15 aluminium plants but now there are just four left so we are buying it from countries like China and Indonesia which make it by burning coal,' he said.
That decline is partly down to the cost of renewables, the rollout of which is typically funded by subsidies that add levies to energy bills. Surging gas price followed Russia's invasion of Ukraine have also fuelled the problem.
'As long as Russian gas was around, we could be globally competitive,' Mr Mytilineos said. 'Now this is gone. This is geopolitics, and Europe is paying the price.'
Addressing Ed Miliband and Sir Keir Starmer's race to decarbonise Britain's economy, Mr Mytilineos warned that green energy policies can come with a heavy price.
'If they want to take these decisions, they must also consider industry. You have to support your industries. Otherwise industries have to find new ways to survive. They have to move.'
Metlen's core business is metal refining. It produces bauxite ore from its own mines in Greece where it also has a refinery and smelter. They annually produce 190,000 tonnes of aluminium and 860,000 tonnes of alumina, a vital ingredient in advanced ceramics.
From the same ore it is now also extracting gallium, a strategically vital metal where China has long dominated global markets. Metlen is also increasingly involved in metal recycling, melting down scrap and targeting valuable metals like zinc and lead.
The company has managed to avoid energy-induced shutdowns because its other key business is energy production: it owns around 14 wind farms, three solar farms and four hydroelectric plants, mostly in Greece, plus several gas fired power stations.
It uses those generators to power its metal refining, giving it a near-unique level of immunity from the high energy prices that are wiping out energy-intensive industries across the UK and Europe.
The comments come as Mr Mytilineos prepares to ring the London Stock Exchange opening bell at 8am on Monday as Metlen joins the market. The company, valued at close to £6bn, is set for inclusion in the FTSE 100 later this year when the index is re-evaluated.
Metlen's move is a vote of confidence in London's beleaguered stock market, which has suffered from a dearth of new listings in the years following Brexit.
Mr Mytilineos said: 'My shareholders ask me this – why London? We consider that despite London going through difficult times after Brexit, Amsterdam, Frankfurt or Paris have not managed to overtake the City as a financial hub.
'I think that having gone through this difficult period, the City will make a big comeback, and London Stock Exchange with it. So when choosing a European exchange with the biggest profile for our company, London was the obvious place.'