Other shutdowns
Aluminum companies have shut down smelters to sell their electricity
allocations in other places. In the summer of 1999, skyrocketing
electricity prices in the midwestern U.S. led Alcan and Southwire to
curtail production at their Sebree and Hawesville smelters and sold their
captive power (105 and 90 megawatts, respectively) to the grid. (Stephen
Johnston, “Aluminium,” Mining Annual Review, March 2000)
In May 2000, Ormet announced that it would limit production at its
Hannibal, Ohio, smelter during the summer and would lay-off, temporarily,
270 workers. “This is an endeavor that no other company in our industry has
been able to accomplish,” said Emmett Boyle, chairman, president and CEO of
Ormet Corporation. “This will make us a more competitive force and will
strengthen our company’s position in the future. We will continually review
the value of selling power to determine if it’s a healthy business venture
for the company. We’ll be looking for a proper balance of energy and metal
sales that will ultimately strengthen the company’s portfolio.”
“The decision to curtail aluminum production at this time ultimately came
down to three economic factors which include extremely low aluminum prices,
higher than usual alumina prices and higher electrical energy prices in the
peak summer months,” explained a company press release. (Ormet, “Ormet
Announces Plans to Curtail Aluminum Production, Sell Power and Alumina,”
company press release, May 18, 2000)
Ramifications of electricity deregulation in the U.S. reaches across the
border into the Canadian province of British Columbia. In late 2000, Alcan
announced plans to shut down three potrooms in its Kitimat Works. The
plant’s union, Canadian Auto Workers Local 2301, said the shutdown is the
result of provincial and corporate “greed.”
“This whole situation stems from the government’s ‘greed’ of making huge
profits by selling power across the border and Alcan’s never ending
‘Corporate Greed’ of maximum profits no matter who or what it affects,” the
CAW local asserted in a Dec. 14, 2000, statement. “The sad part is that our
members are being used as pawns in this battle. The closing of these lines
would have a huge impact on the community and is a direct attack on the
integrity of our local union ‘Alcan must be stopped’ for the sake of our
union brothers and sisters whose jobs will be affected. If we don’t stop
this now who knows, maybe next year more jobs will be eliminated. If the
price of power is right! (“Union Says “No” to Line One Shutdown,” CAW Local
2301, Dec. 14, 2000)
“If Alcan committed to a bad power deal they should pay the price. Our
members, and our community should not have to be the ones that pay the
ultimate cost. When times were good, Alcan didn’t mind reaping all the
additional profits for the last few decades on the surplus power. Yet now
when fortunes turn temporarily around, they don’t want to put any of that
‘surplus’ back into Kitimat Works to save jobs. We remind Alcan that it
also has a commitment to our community as well. Not just their profitable
power commitment with BC Hydro,” added the CAW local. (ibid)
The situation marked a quick turnaround by the BC government. As recently
as December 1997, BC’s premier “invited producers to build smelters in the
province with an offer of cheap electricity,” according to the Mining
Journal (June 5, 1998)
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