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Rio Tinto Alcan seeks competitive power prices

Keywords: Tags  Rio Tinto Alcan, Etienne Jacques, Arnaud Soirat, Aluminium Association of Canada, Jean Simard, electricity, power rates, aluminum Michael Cowden

CHICAGO — Rio Tinto Alcan Inc. wants the province of Quebec to provide cheaper energy to its manufacturing sector, including the aluminum industry.

More than three-quarters of the world’s aluminum smelters benefit from power prices lower than those available to large industrial users in Quebec, Étienne Jacques, chief operating officer of the Montreal-based aluminum producer’s North American primary metal segment, said in a statement. "For Rio Tinto Alcan, competitive energy for the aluminum industry is one of the key components of sustainable growth."

The aluminum industry relies on competitive energy prices, "and Quebec has an opportunity to secure its position as a leading aluminum producer in the world," Rio Tinto Alcan primary metal president and chief executive officer Arnaud Soirat said in a statement.

The executives’ remarks come during a public consultation on energy issues in Quebec and following similar comments in the past week by the Aluminium Association of Canada.

Energy prices have dropped in almost every aluminum-producing region of the world, including in the United States, where power prices are as much as half those available in Quebec, Jean Simard, president and general manager of the association, said in a statement. "The only input over which the industry has no control is the cost of energy ... and that is the only area in which our smelters now struggle to compete."

Quebec’s aluminum industry accounts for approximately 10,000 direct jobs and 20,000 indirect jobs, and is responsible for about 10 percent of the province’s exports, Simard said, citing a study by consulting firm Deloitte. Aluminum smelters also pump $3 billion annually into the province’s economy, he said.

One producer source told AMM that Quebec has lost its status as a low-cost place to produce aluminum, with power costs similar to those in Europe and the United States before the shale gas revolution. "We need a lower power rate if we’re going to invest in new aluminum capacity," he said.

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