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Plenty of power available for Ky. smelter: Century

Keywords: Tags  Century Aluminum, Michael Bless, Big Rivers, Kenergy, Hawesville smalter, aluminum, aluminum prices, London Metal Exchange Suzy Waite


NEW YORK — Century Aluminum Co. maintains there is plenty of transmission power available for purchase on the spot market to supply its 250,000-tonne-per-year Hawesville, Ky., smelter.

"There are significant blocks of power to be bought out there," Century president and chief executive officer Michael Bless told attendees Wednesday at Dahlman Rose & Co.’s third annual Global Metals, Mining and Materials Conference in New York.

Century executives continue to meet with representatives from Kenergy Corp. and Big Rivers Electric Corp, both of Henderson, Ky. Bless confirmed that the company will likely purchase power off of the grid, or spot market, rather than signing another multiyear contract with Big Rivers.

Average contract power costs are approximately $50 per megawatt hour (MWh), but Century would pay around $35 per MWh if it were to purchase from the spot market for five years, Bless said.

"That’s over $200 a tonne and $50 million right there (in savings)," he said. "That’s where we’re headed."

Century gave Big Rivers a 12-month termination notice in August, saying that the smelter wasn’t economically viable under the existing power contract and at today’s London Metal Exchange prices ( amm.com, Aug. 20).

Three-month aluminum closed the LME’s official session at $1,987 per tonne Wednesday, down 15.4 percent from this year’s high of $2,349 on Feb. 28.

It is still unclear if Century will continue to use Big Rivers if it goes to the spot market. Century would, in theory, purchase power from elsewhere, a Big Rivers spokesman said, although due to transmission and voltage issues they could technically use Big Rivers’ electricity. ( amm.com, Nov. 12).

Separately, Century will relocate its headquarters from Monterey, Calif., to Chicago early next year. Some 24 employees will move to Chicago by the end of the second quarter.

"It will get us closer to our plants and customers," Bless told AMM on the sidelines of the event.


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