Oct 08 2007

Behind the Shining: Aluminum’s Dark Side

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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