The restarted facilities will increase Alcoa’s aluminum production by 137kt in 2011 and by 200kt/y thereafter.
Capacity will be restarted at the Massena East facility in Massena, NY; Wenatchee Works in Malaga, WA; and Intalco in Ferndale, WA. The restarts are occurring now to help Alcoa meet anticipated growth in aluminum demand and to meet obligations outlined in power agreements with energy providers.
Power rates at Wenatchee and Massena, where long-term contracts have been secured, are about 40% below worldwide averages. Intalco is operating under its current 17-month contract. All the restarts will be powered by hydropower and will be free-cash-flow and earnings accretive in the first year.
Restarting one potline at Wenatchee ensures Alcoa will meet the requirements of a new contract with the Chelan County Public Utility District.
The new 17-year hydropower contract goes into effect in November, 2011 and provides enough energy for increased production of 42kt/y, bringing another 80 new jobs to the region.
At Massena East, a new agreement with the New York Power Authority allows three potlines to restart and preserves the company’s ability to modernise the plant in the future. It replaces an agreement that was set to expire in April, 2011.
The restart will provide about 120 new jobs through recall or hiring, and secures the future of a total of approximately 385 jobs that support Massena East.
Intalco is currently operating under a 17-month contract with the Bonneville Power Administration (BPA) that provides 320MW of power at the Industrial Power rate.
The restarts will bring about 60 new jobs to the region while negotiations on a long-term contract with BPA continue.
The restarts should be completed during the first half of 2011. Once these restarts are complete, Alcoa will have 674kt of idle capacity remaining.