Alcoa Corporation has announced that it will halt curtailment plans for its San Ciprián aluminium smelter in Spain while it reviews a court decision related to a collective dismissal process.

On October 9, 2020, Alcoa announced its decision to curtail the smelter’s 228,000 metric tons of annual capacity and proceed with the collective dismissal of employees after completing four months of consultations with the workers’ representatives at the San Ciprián aluminium plant. The alumina refinery at San Ciprián was not included in the consultation.

The workers’ representatives filed a lawsuit with the High Court of Justice of Galicia, which ruled in favour of the workers on Thursday, December 17, 2020. In the court’s ruling, it declared the collective dismissal process “null and void.”

As a result, in the fourth quarter of 2020, the Company will not incur the approximately $35 million to $40 million it previously announced as an expected charge for employee-related costs associated with the curtailment and collective dismissal process.

In addition, due to a related labor strike at both the San Ciprián aluminium smelter and alumina refinery, the Company will record a negative impact on income before income taxes in the fourth quarter 2020 of approximately $10 million, primarily related to the refinery. The court’s ruling does not resolve the labor strike.

The Company believes it has acted in good faith and in full compliance with the law. The need to restructure the San Ciprián smelter persists due to significant and permanent structural issues.