Smelting capacity to supply Warrick’s rolling
mill
Alcoa Corporation (NYSE:AA) today announced plans to restart
three of five potlines at its Warrick Operations aluminum smelter
near Evansville, Ind., an action that will further improve the
competitiveness of the on-site rolling mill.
The process to restart the three lines, with 161,400 metric tons
of annual capacity, will begin immediately and is expected to be
complete in the second quarter of 2018. The three potlines will
directly supply the Warrick rolling mill, which serves the North
American market with flat-rolled aluminum for the food and beverage
can packaging industry. The smelter’s molten metal will supplement
purchased scrap metal and other raw materials that the Warrick site
will continue to procure.
“By restarting a portion of the Warrick smelter, we will provide
an efficient source of metal for the co-located rolling mill and
help it meet an anticipated increase in production volumes,” said
Tim Reyes, President of Alcoa’s Aluminum business unit. “The action
will enable us to more fully utilize the assets at this integrated
site for the benefit of our investors, customers, employees and the
community.”
The smelter at Warrick closed in March of 2016. Two of the five
smelting potlines will be classified as curtailed capacity and will
remain idle. After this partial restart, Alcoa will have
approximately 886,000 metric tons idled of its total smelting
capacity of 3.4 million metric tons.
Restart expenses expected to be incurred in the third and fourth
quarters of 2017 are estimated to be between $30 and $35 million
(after-tax), or $0.16 and $0.19 per share, on a combined basis.
Additionally, in third quarter 2017, Alcoa will record an
after-tax benefit of approximately $25 million, or $0.13 per share,
for the reversal of liabilities related to the original
closure.
The Warrick location currently employs about 1,250. The restart
will increase the site’s employment by approximately 275, including
those who will be hired or recalled from layoff status. Some
existing employees will transfer to the smelter.
The federal, state and local governments have all been
supportive of the restart plan. Alcoa appreciates the actions the
Trump Administration has taken to address the challenges faced by
the U.S. aluminum industry, including Chinese overcapacity. As
Warrick Operations restarts aluminum production, Alcoa is confident
the Administration will continue to be attentive to the industry’s
needs.
The state of Indiana, through the Indiana Economic Development
Corp. (IEDC), and Warrick County offered preliminary assistance to
support the restart plan. The IEDC offered Alcoa up to $2.4 million
in conditional tax credits and up to $100,000 in training grants
based on plans to add new full-time jobs for Indiana residents.
"With its decision to restart operations in Indiana, Alcoa is
showcasing the value that this facility and Indiana's manufacturing
expertise provide to its global operations," said Indiana Governor
Eric J. Holcomb. "In Indiana, we're witnessing incredible momentum
as manufacturers continue to choose Indiana for growth, and we're
pleased that Alcoa once again chose Indiana."
Alcoa Warrick Operations is comprised of the smelter and the
rolling operations, which includes state-of-the-art casting, hot
and cold rolling, slitting and coating capabilities. The operations
also include the power supply for the smelter and rolling
operations, consisting of a coal mine that fuels four generating
units with a combined net capacity of about 750 megawatts. Three of
those units are wholly-owned by Alcoa Power Generating Inc. A
fourth unit, Warrick Unit 4, with 300 megawatts of net capacity, is
owned in a 50-50 partnership with Vectren, a utility headquartered
in Evansville.
As part of the smelter restart plan, Alcoa Power Generating Inc.
and Vectren have agreed to jointly own and operate Unit 4 through
December 31, 2023. Vectren’s support in the restart decision
provides important clarity for the power portfolio at Warrick.
Carl Chapman, Vectren Chairman, President and CEO said:
“Restarting the operations of the smelter is a significant economic
development win, and we were pleased to play an important role in
helping make this a reality.”
Ed Hemmersbach, Vice President of Operations for Alcoa Aluminum
said: “We appreciate the assistance and collaboration with numerous
stakeholders in this process, including our employees, United
Steelworkers Local 104, Vectren, and the local and state officials
who have all provided support in our work to strengthen the
integrated operation here in Southwestern Indiana.”
About Alcoa
Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina
and aluminum products, built on a foundation of strong values and
operating excellence dating back nearly 130 years to the
world-changing discovery that made aluminum an affordable and vital
part of modern life. Since inventing the aluminum industry, and
throughout our history, our talented Alcoans have followed on with
breakthrough innovations and best practices that have led to
efficiency, safety, sustainability and stronger communities
wherever we operate. Visit us online on www.alcoa.com, follow
@Alcoa on Twitter and on Facebook
at www.facebook.com/Alcoa.
About Warrick Operations
Alcoa Warrick Operations produces aluminum sheet for beverage
and food can ends, tabs, and other flat-rolled aluminum products,
including lithographic sheet. The facility is the world’s largest
producer of coated container sheet and the only North American
supplier of high-quality lithographic sheet. It also includes four
coal-fired generating units with a combined net generating capacity
of about 750 megawatts, including one unit co-owned with Vectren, a
utility company headquartered in Evansville, Indiana.
Dissemination of Company Information
Alcoa Corporation intends to make future announcements regarding
company developments and financial performance through its website
at www.alcoa.com.
Forward-looking statements
This press release contains statements that relate to future
events and expectations and as such constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include those
containing such words as “anticipates,” “believes,” “could,”
“estimates,” “expects,” “forecasts,” “intends,” “may,” “outlook,”
“plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,”
“would,” or other words of similar meaning. All statements that
reflect the Company’s expectations, assumptions or projections
about the future, other than statements of historical fact, are
forward-looking statements. Forward-looking statements are not
guarantees of future performance and are subject to known and
unknown risks, uncertainties, and changes in circumstances that are
difficult to predict. Although the Company believes that the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these
expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties. Additional information concerning factors that could
cause actual results to differ materially from those projected in
the forward-looking statements is contained in our filings with the
Securities and Exchange Commission. The Company disclaims any
obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise,
except as required by applicable law.
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version on businesswire.com: http://www.businesswire.com/news/home/20170711006541/en/
Alcoa CorporationInvestor ContactJames Dwyer,
212-518-5450James.Dwyer@alcoa.comorMedia ContactJim Beck,
412-315-2909Jim.Beck@alcoa.com
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