SAN FRANCISCO (Thomson Financial) - Alcoa said Thursday it will temporarily
idle half the production at its Rockdale, Texas, aluminum smelter due to local
power supply issues.
As a result, the company said it will lay off roughly 250 workers at the
facility. Three of the plant's six operating potlines will be idled, Alcoa said.
"There have been ongoing supply issues at the dedicated power generating
unit adjacent to our plant, which has forced us to go into the open market to
secure power," said John Thuestad, President of Alcoa's US Primary Metals
division. "Unfortunately local energy costs have escalated significantly over
the past few weeks to an unsustainable level and we have no choice but to idle
production that is reliant on uncompetitive power."
Local market energy costs have increased to as much as $2,000 to $4,000 per
megawatt hour during peak hours, the company said.
The idled potlines represent roughly 120,000 metric tons per year of
production. Output at the remaining three potlines is planned to continue using
contracted long-term power.
Shares of New York-based Alcoa rose 21 cents to $39.31.
Gabriel Madway
gm
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