Alcoa reaches power supply agreement with Quebec

Aluminum company says deal will improve the competitiveness of its three smelters in the province.

March 5, 2014
Recycling Today Staff
Legislation & Regulations Nonferrous

The aluminum firm Alcoa, headquartered in Pittsburgh, and the government of Quebec have reached an agreement designed to improve the competitiveness of Alcoa’s three smelters in Quebec. Under the agreement, Hydro-Quebec will renew Alcoa’s power supply contracts for its Bécancour and Deschambault facilities until 2030 and for the Baie-Comeau plant through 2036.

According to Alcoa, the agreement will allow the company to proceed with $250 million in investments at the three smelters over the next five years designed to improve the aluminum company’s competitiveness. As part of the investment, Alcoa will increase the production of aluminum used for auto manufacturing and will reduce its production of commodity-grade aluminum at its Baie-Comeau casthouse.

“These actions support our strategy to lower the cost base of our upstream businesses while capturing demand for higher-margin, value-add products,” says Bob Wilt, president of Alcoa Global Primary Products. “The agreement will help Alcoa achieve its goal of moving down the global aluminum cost curve, and the casthouse optimization will help meet growing demand for aluminum in the North American auto market.”

In addition to the investments, Alcoa has agreed to support the Quebec government’s electric transportation strategy by considering the Baie-Comeau facility as a potential source of aluminum for emerging technology applications, including aluminum-air batteries.

The previously planned modernization of the Baie-Comeau facility, through which Alcoa would have constructed a new potline to replace the two Söderberg anode potlines it closed last year, is not included in this agreement and will no longer be pursued.

“This agreement marks a new start for our Quebec smelters, and we applaud the Premier (Quebec Premier Pauline Maroisand) and her team for their vision and commitment to Alcoa, our employees and community stakeholders,” says Martin Brière, president of Alcoa Canada Global Primary Products. “Alcoa’s facilities in Quebec can now concentrate on meeting growing global demand for aluminum and continuing to provide important economic benefits to the region.”

Alcoa Canada Global Primary Products operations in Quebec are composed of Bécancour (ABI), Baie-Comeau and Deschambault smelters as well as the Bécancour rod plant. The four plants have an annual production capacity of nearly 1 million metric tons of ingots, castings, billets and aluminum rods, the company says.