TORONTO (miningweekly.com) – American alumina and aluminium producer Alcoa has announced 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.
Alcoa had become the latest of many mining and processing companies across the globe scaling back operations and deferring development projects as lower commodity prices, weak demand and rising capital costs take their toll.
The review would include facilities across the Alcoa system and would focus on higher-cost plants and plants that have long-term risk owing to factors such as energy costs or regulatory uncertainty. The possible capacity cuts could affect 11% of Alcoa’s global smelting capacity.
The company said it currently had 13%, or 568 000 t, of its smelting capacity idle.
“Because of persistent weakness in global aluminium prices, we need to review every option to maintain Alcoa’s competitiveness. Any action taken will only be done after a thorough strategic review and consultations with stakeholders,” Alcoa global primary products president Chris Ayers said in a statement.
The company noted it would consider a wide variety of alternative actions, ranging from discontinuing pot relining to full plant curtailments and/or permanent shutdowns. Alcoa’s alumina refining system would also be reviewed to reflect any curtailments in smelting as well as prevailing market conditions.
Alcoa had set itself a goal to lower its global position on the cost curve for aluminium production by 10% by 2015, and to produce alumina by 7%.