Novelis Closing Brazilian Aluminum Smelter

Novelis Inc. has announced that it will cease operations at its primary aluminum smelter in Aratu, Brazil, by Dec. 31, 2010. In a release, the company said its decision to shutter the facility is due to the smelter’s high operating costs and the lack of a competitively priced energy supply. The plant's small scale, outdated technology and logistical factors also impair its operating efficiency, Novelis added.

The 60,000-metric-tons-per-year facility has been operating at a loss for nearly two years. High energy prices and other structural costs will keep the plant unprofitable at expected aluminum prices for the foreseeable future.

"We made significant efforts to improve performance at the smelter, including restructuring the workforce, installing new plant leadership and adjusting production levels," says Alexandre Almeida, president of Novelis South America. "Unfortunately, we could not achieve profitability for the plant."

The shutdown of the plant will not impact Novelis' other operations in Brazil, including its other aluminum smelter at Ouro Preto.