CHICAGO Century Aluminum Co. plans to idle its Hawesville, Ky., smelter on Aug. 20 and could terminate its supply contract with its largest customer, Southwire Co., unless it can secure a better power deal, the company said April 16.
The Monterey, Calif.-based aluminum producer issued a Worker Adjustment and Retraining Notification Act (WARN) notice to the 750 employees at the 244,000-tonne-per-year Hawesville plant, Century added, also giving conditional notice to terminate its supply contract with Southwire on Aug. 20.
"We deeply regret the need to issue these notices at this time, and understand the uncertainty this action will cause our valued employees, our local communities and our long-standing partners at Southwire," Century president and chief executive officer Michael Bless said in a statement.
Southwire didnt respond to requests for comment.
Century gave Big Rivers a 12-month power termination notice for the Hawesville smelter in August (amm.com, Aug. 20).
The company said it has continued to negotiate with Big Rivers to find a solution that would allow Hawesville to continue operations. "That said, time is running short and without a prompt agreement we will call upon the elected leaders of the Commonwealth to intervene with a solution to avoid the catastrophic economic impact a plant closure would have," Bless said.
A spokesman for Big Rivers said the news from Century came as a surprise, especially given that meetings had been held April 16 and that negotiations are ongoing.
"Obviously were trying to work out a deal to keep the smelter open," the spokesman said, adding that he couldnt go into detail on the content of the discussions because of confidentiality agreements. "Naturally the clock is ticking. But we are willing and always have been willing to work with them."
Kentucky has some of the most competitive power rates in the country, and Big Rivers offers good rates, according to the spokesman.
"But you cant sell power for less than what it costs you to make it," he said, stressing that Big Rivers cared about Century and its workers and wants to keep the Hawesville smelter viable if possible. "If we didnt care, we wouldnt be working with them. And we hope we can come to an agreement thats fair to all our customers, not just one. ... But we cannot control the economic vitality of U.S. smelters."
Talks between Big Rivers and Century resumed after proposed legislation, backed by Century and introduced in both the Kentucky House and Senate, died in the legislature March 26 (amm.com, April 1). The proposal was aimed in large part at allowing Centurys Hawesville smelter to access electricity on what Century considered more favorable terms than those offered by Big Rivers.
Market sources have questioned whether Centurys appeal for political intervention will work, noting that some politicians consider that matter to be a private contract dispute and not an issue in which the state government should become involved.
Montreal-based Rio Tinto Alcan also gave its 12 months notice Jan. 31 for its Sebree, Ky., smelter (amm.com, Feb. 4). The two smelters together account for about 70 percent of Big Rivers power.