France saves jobs with sale of Alpine aluminum plant


France breathed a sigh of relief at the weekend after Anglo-Australian mining giant Rio Tinto said it had received a binding offer for its French aluminum plant, in a deal that - if approved - would save more than 500 jobs.

Unions feared Rio Tinto's aluminum plant in Saint-Jean-de-Maurienne in the Alps would close after it was put up for sale last year.

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Rio Tinto, the world's third-largest miner, received a firm offer for the plant and associated smelter from Germany's Trimet aluminum AG in a deal backed by the French state and energy group EDF , which is planning to take a minority stake.

The plants produce aluminum wire rods which are used to make electric cables for the energy industry and connecting elements in the automobile industry.

For Rio Tinto, the disposal is part of a strategy to reduce its aluminum activities and lower costs.

France, which is battling recession and rising unemployment, has seen many smelters and metals production sites close in the past decade as global mining groups transferred their production to lower-cost regions.

In April, ArcelorMittal shut down a major steel plant in Florange in eastern France, stirring anger among workers as President Francois Hollande had promised during his election campaign to revive France's industry.

The Rio Tinto aluminum deal involves an investment of more than 200 million euros over six years. Other details or financial elements of the transaction were not disclosed.

"The Trimet group gives new life to this site with a Franco-German partnership," said French Prime Minister Jean-Marc Ayrault who travelled to the site on Saturday to conclude the deal. "There is no future for France without industry."

Industry Minister Arnaud Montebourg, also present at the signing in Saint-Jean-de-Maurienne, said last week the transaction gave hope France was "building a Franco-German Pechiney."

French aluminum giant Pechiney, which used to own the Alpine plant dating back to 1907, was sold to Canada's Alcan, itself later absorbed by Rio Tinto.

(Reporting by Catherine Lagrange and Astrid Wendlandt; Editing by Hugh Lawson)