NEWS RELEASE · 9th September 2010
Rio Tinto Alcan Primary Metal Group announces discontinuing Billet production at BC Operations, Kitimat Works by the end of 2011
Today, Tuesday, September 8, 2010, Rio Tinto Alcan Primary Metal announced to its Asia Pacific and North American customers that it will officially discontinue billet production at Kitimat’s BC Operations by the end of 2011.
Global billet production will shift to Rio Tinto Alcan primary metal smelters located in Australia and New Zealand, as these smelters are well positioned to serve the billet market in the Asia Pacific region and elsewhere. In fact, these smelters are already supplying billet to the west coast of the North American market.
In light of this global announcement and to ensure for the long term sustainability of Rio Tinto Alcan’s global billet business, BC Operations has begun the process of advising employees about the production changes to take place over the coming year.
Casting and Wharf manager Kirk Grossman says, “The financial return from our billet market has been quite challenging in recent years, and it is no secret that the Asia Pacific forecast for the billet market continues to be cash negative. The time is right, and it makes sense to transfer the production of billet to the Asia Pacific region where our customers can take advantage of market premiums and reduced freight costs.”
BC Operations Director Tino Pereira adds, “It is important to remember that the overall hot metal production at Kitimat Works will not be impacted by this global decision. As a matter of fact,” Tino adds, “We are already increasing the number of pots in operation so that we continue to maximize sheet production at DC4. The balance of our product mix will continue in remelt.”
Vice President of BC Operations and strategic projects Paul Henning stresses, “This shift in product mix will take effect by the end of 2011 and is in line with our goal to maximize production of Sheet products with the balance of hot metal cast in remelt form as per the KMP expected product mix. During the period before the end of 2011 we will return potlines 1C, line 2 and lines 3-5 back to full production which will provide enough employment to avoid layoffs.”
Comment by Paul McEwen on 1st November 2010
On August 5, 2010, the Daily reported, "ALCAN MODERNIZATION BEGINS TODAY" which advised that lines 6 and 7 would be shut down thus eliminating 67,000 metric tons of metal producing capacity. There was no mention made in the article quoted from, of the amount of money RTA was going to spend on rebuilding the smelter.
Since RTA bought Alcan in 2007 I have heard variously that Rio Tinto intends to spend between 2 and 5 billion dollars on the smelter upgrade. A project of this magnitude would do a lot for Kitimat. I have also recently heard that the amount will only be $578 million, much less worthwhile for the town. Does anyone know which of these numbers is correct? Paul Henning has said that "returning potlines 1C, line 2 and lines 3-5 back to full production will provide enough employment to avoid layoffs." Is this confirmation of the low ball $578 million upgrade? Kitimat can't plan for its future if it doesn't know so it seems to me that a Kitimatian should call up Paul Henning and ask him directly.
My family moved to Kitimat in 1954 the year the first Ingot was poured and I go "home" to visit old friends frequently. I wasn't pleased when, in October 2007, "Rio Tinto received approval from The Honourable Jim Prentice, Canada's Minister of Industry, under the Investment Canada Act for the proposed acquisition of Alcan Inc. by a subsidiary of Rio Tinto," because Alcan then dissappeared into the maw of a transnational giant responsible to its shareholders and its multiversity of business interests of which Alcan is only one, smal part. Perhaps, unfortunately, Paul Henning only will be able to answer, "I don't know, I just work here, decisions are made elsewhere."
Comment by Sandra Capezzuto on 9th September 2010
Australia and New Zealand smelters supply billet to the west coast of North America but, reduced freight cost is sited as a reason to move the production of this product from Kitimat?