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Century warns Sebree cuts may loom

Jan 27, 2014 | 10:34 AM | Michael Cowden

Tags  Century Aluminum, Sebree smelter, Kentucky Public Service Commission, KPSC, Aleris, aluminum smelter, billet, sows power contract


CHICAGO — Century Aluminum Co. might halt production at its Sebree, Ky., smelter if a new power agreement isn’t approved by state regulators next week, according to a company spokesman.

The Chicago-based aluminum producer is also considering other options if a deal isn’t reached before the current power contract expires Jan. 31, the spokesman told AMM Jan. 24, although he declined to disclose what those alternatives might be.

But the Sebree smelter will "begin curtailing" if Century’s proposal to buy power for it on the open market is rejected by the Kentucky Public Service Commission (KPSC), the spokesman said, declining to reveal whether curtailment might mean idling or demolition.

"We haven’t made that decision yet," he said. "But we wouldn’t have power coming into our potlines department, which means we would no longer produce metal."

Century has already negotiated an energy agreement with power suppliers for its Sebree facility, and the company said in November that an agreement with Kenergy Corp. and Big Rivers Electric Corp., both in Henderson, Ky., has been filed with the KPSC. But the deal remains subject to approval from third parties, including the KPSC and the U.S. Department of Agriculture’s Rural Utilities Service (amm.com, Nov. 20).

The commission should have a decision before Jan. 31, a KPSC spokesman told AMM Jan. 23. "I would expect it to be sometime in the second half of the week. ... Clearly we’re going to try to get it out before deadline."

The Sebree smelter has the capacity to produce about 205,000 tonnes of metal per year, which is cast into billet or low-profile sows, according to Century’s website

Century has previously threatened to shutter the Sebree smelter unless it received a better power contract (amm.com, Nov. 1). But the company also said it expects the market-based contract to be approved by the end of January (amm.com, Nov. 4).

However, the proposed contract has come under fire from the Kentucky Industrial Utility Customers, whose members include Cleveland-based Aleris International Inc. (amm.com, Oct. 11).




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