On 29th December 2021, the world's sixth-largest producer of aluminium Alcoa has announced that it has drawn up an agreement for the curtailment of operations at its San Ciprian smelter in Spain for the next two years. However, the American industrial corporation has also delivered its commitment to initiate restarting the facility in January 2024.
Alcoa, with its corporate headquarters in Pittsburgh, Pennsylvania said the agreement with workers' representatives at the San Ciprian aluminium facility is focused on settling the challenges it is countering in regards to outrageous energy prices.
Alcoa stated: “The deal will see the curtailment activity at the facility, which has 228,000 metric tons of annual capacity, begin Jan. 1, with the goal of completion before the end of that month.”
However, with the curtailment of the facility, the company said: Alcoa seeks to secure as soon as possible long-term power purchase agreements, beginning from 2024."
The aluminium giant anticipates recording restructuring-related charges in Q4 2021 of about $60 million, pre-and after-tax, or 32 cents a share. Alcoa said about half of the costs will be paid in each of 2022 and 2023.
“Alcoa committed $68 million for capital investments and $35 million for restart costs at the facility.”
Alcoa further added: “As part of the deal, workers agreed to cease a strike action that affected the smelter and the alumina refinery. The company will provide employees full wages and benefits during the curtailment period and provide a new collective bargaining agreement which includes pay increases extending to the end of 2025."
“The company will also extend the contracts of contractor companies through 2024. While the smelter is curtailed the casthouse will continue to operate, and the San Ciprian alumina refinery will continue to operate normally.”
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