Gregory, Texas-based Sherwin Alumina, which operates an alumina refinery in Corpus Christi, Texas, has announced it is winding down its operations in 2016.
“This was an extremely difficult decision to make, and one we arrived at only after exhausting all other options,” says Thomas Russell, president and CEO of Sherwin. “We made—and will continue to make—every effort to sustain Sherwin as a viable business. Unfortunately, at this time, the best available option for our stakeholders is an orderly wind-down of Sherwin’s operations.”
Russell cited the chapter 11 bankruptcy filing of Franklin, Tennessee-based Noranda Aluminum as a key factor, and “Noranda’s decision to reject its bauxite supply contract with Sherwin.”
As part of its wind-down plan, Sherwin will sell substantially all of its assets to Corpus Christi Alumina LLC (“CCA”), an affiliate of its senior secured lender Commodity Funding LLC, under a chapter 11 plan of liquidation to be reviewed by the bankruptcy court overseeing Sherwin’s chapter 11 cases.
The alumina refining and primary aluminum sectors in North America have been shedding production capacity for much of the past two decades as production moves closer either to where demand has grown the fastest, in China, or to the parts of the world closer to where bauxite is mined.
In its April 2016 report on aluminum production in the United States, the U.S. Geological Survey (USGS) writes, “Following recent smelter shutdowns, only two companies [are reporting] domestic production of primary aluminum” in the United States.
Secondary aluminum production in North America has been comparatively stable. In the same April 2016 USGS report, the agency writes, “Total aluminum recovered from scrap in April 2016 was 292,000 metric tons, 3 percent less than that recovered in March but the same as that in April 2015.”