TORONTO (miningweekly.com) – US-based aluminium producer Alcoa on Thursday said it would shutter two potlines with a combined capacity of about 105 000 t and push back construction of a new potline at its Baie-Comeau smelter, in Quebec, as part of a revised modernisation plan for the smelter.
Alcoa announced at the start of the month that it would review 460 000 t of smelting capacity over the next 15 months for possible curtailment, in an effort to maintain the company’s competitiveness, as aluminium prices have fallen more than 33% since their peak in 2011.
The company said the continued low aluminium price had forced it to permanently shut down the two potlines, which were among the highest-cost potlines in the company’s portfolio of plants, by August, and defer construction of the new potline from 2016 to 2019, subject to board approval.
The company would also invest $100-million in the smelter over three years, which would include $30-million to upgrade the plant’s casthouse facilities in support of the growing automotive market. This is in addition to the $75-million already dedicated to rebuild the port facilities to better meet the future needs of a modernised plant.
“The government of Quebec proved to be very open to reviewing the schedule when it became important for Alcoa to adapt to market realities and make the project as cost-effective as possible. These efforts will help move our Baie-Comeau plant down the global aluminium cost curve, and continue to provide important economic benefits to the region,” Alcoa Canada primary products president Martin Brière said.
Alcoa said the revised project schedule would not impact its commitments to the Quebec government, and would have a positive effect on the environment. As agreed in November 2011, the company would provide $50-million over 25 years to the Economic Development Fund managed by the provincial government, and would continue to contribute to its Alcoa Sustainable Communities Fund, with an investment of $10-million over 25 years for the Baie-Comeau community.
The closure would also result in an immediate 40% reduction in greenhouse-gas emissions for the facility.
Alcoa expected restructuring charges related to the closures of $135-million to $155-million, or $0.11 to $0.13 a share, on an after-tax basis in 2013.
Alcoa had also earlier this month said it would invest $275-million over the next three years to expand and convert capacity at its rolling mill in Alcoa, Tennessee, to support automotive producers’ plans to use more aluminium sheet to increase fuel efficiency, safety, durability and performance of cars and light trucks.
Alcoa said it wanted to meet the growing demand for light, durable and recyclable aluminium sheet for automotive production.
The company’s NYSE-listed stock traded at $8.50 apiece on Thursday.