Alcoa curtails smelting capacity at Intalco

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Alcoa has decided to curtail the remaining 230,000 t of smelting capacity at its Intalco plant in Ferndale, Washington due to declining market conditions.

The full curtailment, which includes 49,000 t of earlier curtailed capacity, is expected to be complete by the end of July 2020. The smelter recorded a net loss of USD24m in the first quarter of 2020.

“While our employees have worked diligently to improve the facility, the smelter is uncompetitive, and current market conditions have exacerbated the facility’s challenges,” said Alcoa president and chief executive, Roy Harvey. “This is difficult because of the impact on our employees, and we will ensure appropriate support as we work to safely curtail the facility.”

30% of smelting capacity curtailed in total

The action will bring Alcoa’s total curtailed smelting capacity to 880,000 t, or around 30% of its total global smelting capacity.

The company will record estimated restructuring charges of USD25m (pre- and after-tax) in the second quarter of 2020 associated with the curtailment, for employee-related costs and contract termination costs, which are all cash-based charges expected be paid primarily in the third quarter of 2020.

Intalco employs some 700 people, and the workforce will be significantly reduced due to the curtailment.

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