) announced that it will delay the construction of a potline at
its Baie-Comeau smelter in Quebec as part of a revised
modernization schedule and will start preparing for the upgrade
by investing $100 million over the next three years and
permanently closing the plant's two Soderberg potlines.
As a result, the new potline, which was originally scheduled
to be operational by 2016, is now expected to be in service by
2019. The revision is based on the prevailing market
The $100 million investment for the smelter includes $30
million for upgrading the plant's casthouse facilities in support
of the growing automotive market. The revised project schedule
will not affect Alcoa's commitments to the Government of Quebec
and will have a positive effect on the environment.
Alcoa expects to complete the closure of the two potlines by
Aug 2013. These potlines have a total capacity of 105,000 metric
tons and are a part of Alcoa's previously announced curtailments
of 460,000 metric tons of smelting capacity. The announcement of
the shutdown is in sync with Alcoa's strategy to move down the
cost curves as these potlines represent the highest-cost smelting
capacity. The shut down will result in a reduction of greenhouse
gas emissions at the Baie-Comeau plant by about 40%.
Alcoa expects restructuring-related charges associated with
the closure to be between $135 million and $155 million
after-tax, or 11 cents to 13 cents per share in 2013, of which,
roughly 30% would be recorded in the second quarter. Cash costs
are expected to be about $100 million in 2013.
Alcoa, which is among the prominent players in the mining
industry along with
Aluminum Corporation of China Limited
BHP Billiton Limited
), is the world leader with respect to production and
management of primary aluminum, fabricated aluminum, and alumina
as well as the world's largest miner of bauxite and refiner of
Alcoa currently retains a short-term Zacks Rank #3 (Hold).
Another company in the mining industry with favorable Zacks
Rank is Anglo
American Platinum Ltd.
), having a Zacks Rank #2 (Buy).
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