Alcoa Postpones Shutdown of Washington Smelter

Alcoa has postponed a final decision on curtailing production at its Ferndale, Wash., aluminum smelter. The Bonneville Power Administration has scheduled a rate hike for October 1 that would increase costs at the plant.

Elected officials and others in the region are still working to mitigate the rate increase. Given that work, the company is prepared to wait until October 15th to make a decision on the plant's future.

"Over the past few years, BPA rates have risen sharply, making the Intalco plant less competitive globally," said Bernt Reitan, president of Alcoa Primary Metals. "Given uncertainty about the rate increase, we must continue to prepare for a shut-down. But in fairness to our employees and the community, we will wait another two weeks so there is more certainty about the costs before making a decision."

Alcoa is currently running two pot-lines at the Intalco plant with approximately 110,000 metric tons per year of production. Alcoa's interim power supply agreement with BPA is scheduled to expire on September 30, 2003. In the future, Alcoa may adjust production at Intalco as market conditions warrant. Alcoa owns 61 percent of the Intalco facility with the remainder owned by a Japanese consortium.