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
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
"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.