CHICAGO Century Aluminum
Co. is optimistic that it can restart or maintain operations at
several facilities in the United States and Iceland as long as
it can secure competitive power agreements.
The Monterey, Calif.-based
company secured a better power agreement for its facility in
Mount Holly, S.C., and thinks it should be able to do the same
at its facilities in Hawesville, Ky., and Ravenswood, W.Va.,
company president and chief executive officer Michael Bless
said during a conference call.
"We strongly believe there is a
consensus that this country ought to have a strong indigenous
primary aluminum supply, especially for key industries like
aerospace and the electrical grid," Bless said.
Century saw its Hawesville
operations improve throughout 2012, with conversion costs down
$250 per tonne in the fourth quarter compared with the same
period a year earlier, Bless said. But that hasnt been
enough to offset a "crisis" with Centurys current power
supplier, Henderson, Ky.-based Big Rivers Electric Corp., he
Despite the production
improvements, Hawesville "is not viable" without a better power
deal, Bless said. Century is therefore pushing for legislation
in Kentucky that could allow it to access power on the open
market, something that could potentially save the company as
much as $50 million per year and keep Hawesville "viable for
years to come," he said.
Thousands of jobs and much
economic activity is at stake if Centurys Hawesville
plant and Rio Tinto Alcans smelter in Sebree,
Ky.which together account for approximately 70 percent of
the utilitys power loadcannot achieve better power
deals with Big Rivers, Bless said.
Century is looking to link a
portion of its Ravenswood smelter power costs to prices on the
London Metal Exchange, savings that would be necessary to
justify restart costs of about $90 million, Bless said.
In Iceland, Century is looking
to boost hot metal capacity at its Grundartangi smelter by
about 15 percent over the next four years. The project, which
is ahead of schedule, will cost approximately $65 million, with
about 40 percent of expenditures this year, he said.
The Grundartangi expansion has
been made possible in part by Centurys acquisition of
Zeeland Aluminum Co., a 150,000-tonne anode facility in
Vlissingen, the Netherlands (
amm.com, June 11). But restarting just half the
anode plant, or one furnace, is expected to cost between $25
million and $30 million, with the restart of another furnace
another $10 million to $15 million, Bless said. The bulk of the
capacity expansion at Grundartangi, which produced at an annual
rate of 289,000 tons in the fourth quarter, wont occur
until 2014 and 2015, he added.
Century also is looking to have
its Helguvik, Iceland, aluminum plant up and running "as early
as possible" in 2013, assuming a favorable power agreement can
be negotiated, Bless said. "Were reasonably confident
that something ought to get done one way or another this year
and get that project back up and running." For the moment,
however, Century has decided to close down the plant for the
winter, Bless said.
Questioned by an analyst on
whether Century might look to expand in the Middle East, Bless
balked. "I would never say no. ... (But) I
wouldnt wait up at night for us to announce a Persian
Gulf project," he said. The question came after Bless noted
that, with the exception of some large projects in the Persian
Gulf, most new aluminum production capacity is coming from
greenfield projects in northwest China.