NEW YORK Noranda Aluminum
Holding Corp. anticipates that an ice storm that hit its New
Madrid, Mo., smelter nearly four years ago will have a negative
impact in the fourth quarter.
During the January 2009 ice
storm, Noranda shut two of its three potlines down at New
Madrid, but kept one "operating through and immediately after
the ice storm," Layle "Kip" Smith, Noranda president and chief
executive officer, told analysts on a call following the
release of the companys third-quarter earnings.
"During that outage, we were
getting surges of power. Wed have power for a while, then
it would fail, then it would come back again. There were lots
of ups and downs," Smith said.
These power outages only started
to take their toll in the third quarter of 2012, when Noranda
observed "higher than normal failure rates for the ...pots that
it operated during, through and immediately after the ice
storm." This caused them to "expire earlier than expected and
within close proximity to each other" during the quarter, Smith
Typically, Noranda might have
two to three pots down for relining at any given time. However,
during the third quarter of this year, Noranda was forced to
reline the majority of the pots in the first potline
simultaneously, representing some 25 percent of its
"This was not a planned series
of relining. It was a result of the power outage we had in
2009," Smith said.
It cost the company around $2
million to $3 million in the third quarter, and Noranda
forecasts a similar impact in the fourth quarter.
External shipments declined as a
result of the relining, with Noranda shipping 120 million
pounds of primary aluminum in the third quarter, down 3 percent
from 123.8 million pounds in the same quarter a year ago.
Primary aluminum shipments
through September also declined 4 percent to 369.1 million
pounds from 383 million pounds in the same period of 2011.
However, Smith maintained that
the brunt of the maintenance is behind the company.
"Weve brought in
additional resources to increase our pot-building abilities
(and) are working on this. Getting pots back to normal levels
is a top priority. We are putting more pots back into
production each week," Smith said. "The tag line is, we believe
weve now turned a corner, and were putting more
pots in service.
"The team did a tremendous job
in 2009 keeping the line going, and we now (know) what happens
to a potline that is exposed to that kind of power outages," he
added. "We hope to never see it again."