REPORTING · 19th September 2010
Rio Tinto Alcan held a stakeholder meeting at Kitimat Valley Institute on Thursday, September 16th. Representatives of Economic Development Agencies including KTIDS, TEDA, PREDC were present along with representatives of Bechtel, AJ Forscythe, Envision and the media.
Paul Henning, Vice President of BC Operations & Strategic Projects Western Canada introduced the history of the company with a world map showing the resources harvested and processed by Rio Tinto Alcan (RTA). He expressed they produced billet, re-melt and sheet aluminum with billet production to end in 2011 so customers can find other sources of aluminum.
Henning was pleased to describe how the Smelter has improved their safety standards at the plant since 1992. He touched on the closure of lines 7 and 8 and expressed they would not be coming back until they have been replaced with a new smelter. He spoke highly of the workers who closed the line with pride before being transferred from those lines to other lines.
Henning also spoke to the sale of power which is most likely traveling as far away as Prince George along highway 16. However, when the KMP is finished, there will only be enough power to fuel Kitimat and Terrace.
Michel Lamarre, Project Director of the Kitimat Modernization Project walked though the plans for the modernization. He explained lines 7 and 8 were sitting on the ground the new smelter would occupy. The new smelter would consist of four pot lines with 384 pots. He also explained the differences between the old technology and the new technology.
Lamarre talked about the power. During the modernization, the power has to go somewhere so they will keep lines 1-5 operational. As the new lines go up, the older lines will be slowed down and the power will be transferred to the new lines. He explained the new plant will reduce the footprint of the plant by 40% and will be safer and cleaner and he expects it to have a very long lifespan.
In 2010, Alcan started work on the Anode Pallet Storage Building, cleared the land for the camp and constructed a bypass road passed the construction. He explained the plans for 2011 are to build the infrastructure for the camp and convert the construction site, tear down lines 7 and 8 and build the new Reduction Service Building which will help them keep the existing plant operating.
One of the other items which the RTA representatives were pleased to have in place was a bypass road. “The bypass road has been built first to make sure that the people going to the existing plant can bypass by that road,” said Lamarre. “The bypass lane will be used during construction as a staging area to stage the vehicle and the truck delivery.”
According to Colleen Nyce, Rio Tinto Alcan is still analyzing whether or not Hospital Beach will be closed during the construction phase because of the vigorous construction traffic.
On the topic of money, KMP is currently valued from 2.5 to 2.6 billion dollars. The project has been funded with 578 million dollars which would take them to the end of 2011. Henning stated they expect to get the rest of the money to modernize the plant at that time and this would be when the project receives full board approval. When asked what would happen if the rest of the money did not come through, Henning replied this had happened in 2008 and the project was delayed.
“We believe the economy is much stronger, the confidence in the company, the confidence in the economy. I think the alignment is strong towards full funding,” said Henning. “The project remains top three projects. Right now, the timing is determined by company confidence, national confidence and project performance. The business case for the project remains extremely strong,” said Henning.
The Alcan representatives were asked when they will hit the point of no return. Henning replied the closure of lines 7 and 8 was not a small decision as they would not be reopened.
“To permanently close that area of the plant was not an easy decision but it was a good decision, and that’s a decision that came right through the organization,” said Henning. That’s something that’s supported and linked to the project team, the senior management, so that’s why I feel that’s a threshold decision.”
On the topic of the camp, Lamarre expressed it would start at 500 workers and increase to 1,500 with 100 people maintaining the camp. He expressed during the tour they would look at the labour pool in Kitimat and Terrace first, then look out at the Northwest Region, British Columbia and so on and so forth for hiring.
Lamarre also talked about a private labour agreement between RTA and trade unions. There is no shortage of labour. Lamarre also pointed out they will offer training. Kevin Dobbin stated KVI will be starting programs to train local workers in the field of construction in January adding other training courses would also be offered.
In addition to the camp, Rio Tinto Alcan has just completed a study of all of the available houses, motel rooms and apartments for rent in Kitimat. Henning joked about being happy to take complaints about lack of rooms in hotels, seats in restaurants and people who are unable to schedule a tee time.
They were asked if Kemano Completion was on the books. “We don’t need it. The power required for the plant is assured us. Kemano is producing that energy today,” said Henning. “I look at Kemano just as vigorously as I look at the smelter, every day. Can we make it bigger, can we make it stronger, can we make it more reliable, absolutely. But none of that is Kemano Completion. That is just good practice. […] The Smelter is the key. Kemano is more then sufficient to supply everything we need for KMP and beyond but we continue to look at optimizing Kemano but again, that’s not Kemano Completion.”
Henning hoped to be the lowest cost producer of aluminum in the western world. He explained the modernized plant would be more efficient then the current plant. Although it uses more energy, it uses the energy much more efficiently and produces more aluminum. However, it would take a great set of conditions to move on to additional phases.
“I know we’ve had a few false dawns but as you’ve heard today and I hope you’ve felt today, it’s moving and it’s moving pretty quick. I was with the union this morning and they were complaining about how fast it was going. I will take that complaint every day,” said Henning. “It’s real. Our employees are feeling it, the pace of change, the rate it is coming at us.”
Lamarre & Henning
The modernization promise means in a few years, the new plant could be sitting on this land and the land in the photo below
Among the buildings shown here are lines 7 and 8 which will be torn down for the modernized smelter.