MASSENA - Alcoa announced Wednesday that it will permanently close the remaining two potlines at its east plan Massena sometime in the first quarter of this year
The announcement came through a statement released by the companys corporate office Wednesday afternoon. The closure will mark at least a temporary end to a facility that has been producing aluminum since 1959.
Attributing the closure the plants non-competitive potlines, the statement said Wednesdays decision will reduce Alcoas smelting capacity by 84,000 metric tons. The plant has 332 employees.
Prior to the release, company officials shared the news with plant employees, as well as local government leaders.
We will be working with our unions, state, local and other stakeholders to minimize the impact of these changes, said Alcoa Global Primary Products President Bob Wilt. We appreciate the support of the New York Power Authority (NYPA) and will work with them and others to ensure our continuing success at Massena West.
United Steelworkers Local 450 President David W. LaClair Jr. said the future of the plants nearly 350 employee depends largely on how those meetings with NYPA and the state of New York go.
Alcoa is talking with NYPA and until we know the outcome of those discussions, everything remains up in the air, he said, including what will happen to the plants employees and whether or not it will move forward with modernization. Until we know what happens with the power authority and its impact on modernization, we wont know fully what impact this will have.
Alcoa Manager of Media and Corporate Relations Christa Bowers said in an email the company is hoping to minimize that impact on its employees. Sources have said that could include transferring employees to the west plant and using some employees to tear down equipment inside the east plant. Those moves would need to be negotiated with the unions.
We will be discussing these issues with the unions, she said. We will work with the local unions to minimize the impact on jobs.
Given the quality of jobs offered at Alcoa and the number of jobs in limbo, Mr. LaClair said employees and their families arent the only ones who should be worried.
Theres a lot of people that could be impacted by this, from the plants nearly 350 employees to the areas small businesses, he said. What happens with the state and the power authority will determine a lot.
As a condition of the deal struck between Alcoa and the power authority, Alcoa has committed to invest at least $600 million to modernize its Massena operations, while vowing to retain a minimum of 900 jobs at the companys east and west plants. In return for the investment and commitment to jobs, Alcoa receives 478 megawatts of low-cost power from NYPAs St. Lawrence-Franklin D. Roosevelt Hydroelectric project.
Modernization plans call for the construction of a new potline at the east plant, which would produce 144,000 metric tons of aluminum per year, as well as upgrades to the west plant, and modifications to other facilities that will help integrate the two plants and support the new potline.
According to Alcoas website, the companys east plant uses antiquated Soderberg technology, while the west plant uses a more modern pre-bake technology.
An overview of the project on the companys webstie explains, Because of the way the pre-bake pots operate, once the modernization project is complete the east plant will see significant improvements in air quality and emissions, less waste generated in the aluminum-making process and a significant reduction in the amount of dust employees have to work around, creating safer, better, working conditions.
Ms. Bowers said she is not anticipating the closure to affect the companys modernization plan schedule, noting though a final decision on whether to move forward with the project is not due until 2015.
In April, the company announced its plans to spend $52 million through 2015 for site work and support projects that were scheduled to begin in June. That $52 million was in addition to $40 million the company had already spent on the modernization effort.
Alcoas review of its primary metals operations is consistent with the companys 2016 goal of lowering its position on the world aluminum production cost curve to the 38th percentile, and the alumina cost curve to the 21st percentile, according to the corporate release.
In 2013, the company met its goal of lowering its cost position in both aluminum smelting and alumina refining, having reached the 43rd percentile on the global aluminum cost curve, and 27th percentile on the global alumina cost curve. These shifts represent an 8 point movement and 3 point movement, respectively, since 2010.
Including the closure of the remaining two potlines at Massena East, Alcoa has announced closures or curtailments representing 361,000 metric tons of the 460,000 metric tons placed under review in May of 2013. Once the Massena East potline closure is complete, Alcoa will have total smelting operating capacity of 3,950,000 metric tons, with approximately 655,000 metric tons of capacity idle.
The Alcoa East smelter, when its three potlines were operational, had a smelting capacity of 124,000 metric tons. The Alcoa West plant potline has a capacity of 130,000 tons.
We are taking decisive action to close the remaining potlines, given they are no longer competitive, Nr. Wilt added. We continue to reshape our commodity business to ensure it is positioned for long-term success.
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