CHICAGO Century Aluminum Co. has completed its acquisition of Rio Tinto Alcan Inc.s smelter in Sebree, Ky.
The Chicago-based aluminum producer said that the Sebree smelter should complement its operations in Hawesville, Ky., roughly 60 miles away.
With the changes occurring in U.S. energy markets, we believe Sebree, along with our existing smelter at Hawesville, will be competitive in a global market, Century president and chief executive officer Michael Bless said in a statement June 3.
A surge in natural gas production from shale formations in North America has led gas prices to fall to historically low levels.
In addition, Century has reached a tentative new power agreement for its Hawesville smelter with utility Henderson, Ky.-based Big Rivers Electric Corp. that would allow the facility to get power from the open market (amm.com, April 29
), it said.
Access to market-based power is a critical enabler for sustained operations at Hawesville and Sebree. We believe the framework reached with the power provider for market-priced energy for Hawesville will serve as a model for Sebree, Bless said June 3.
Centurys Hawesville smelter has a rated capacity of 244,000 tonnes of primary aluminum per year and employs approximately 650 people. The Sebree plant employs more than 500 and is capable of producing 205,000 tonnes of primary aluminum, Century said.
The two smelters account for an estimated 70 percent of Big Rivers output, a factor that could give Century leverage in negotiations (amm.com, Feb. 8
Century agreed in April to acquire Rio Tinto Alcans Sebree smelter for $61 million in cash and the assumption of $4 million in liabilities (amm.com, April 29
But under the terms of the deal, Century also received $71 million in working capital from Rio Tinto Alcan, which will in addition assume all past environmental liabilities and has agreed to fully fund the operations pension plan.
Rio Tinto Alcan has said that it wants to continue to play a role selling metal produced at the smelter and casthouse in Sebree even after selling the operation to Century.
The Montreal-based aluminum company, which said it has already agreed to honor all current commercial agreements for the sale of billet and ingot from Sebree through the end of 2013, has said it is in talks with Century to maintain some sourcing presence at the facility in 2014 and beyond" (amm.com, May 10