Alcoa Plans To Permanently Shutter Portovesme Smelter In Italy

(RTTNews) - U.S. aluminum producer Alcoa, Inc. (AA) said Monday that it plans to permanently shutter its Portovesme primary aluminum smelter due to high cost of smelting. The high cost of smelting at the plant was found not viable and competitive in the market.

"The fundamental reasons that made the Portovesme smelter uncompetitive unfortunately have not changed. We will continue to meet the commitments made to our employees and our stakeholders, acting in good faith as we have always done," said Bob Wilt, President, Alcoa Global Primary Products.

The company noted that the closure will reduce Alcoa's global smelting capacity by 150,000 metric tons to 3.6 million metric tons per year.

The Carbonia-Iglesias, Italy-based smelter, which has been curtailed since November 2012, was one of the costliest smelters in the Alcoa system.

Meanwhile, Alcoa has greed to provide financial social support, along with outplacement and re-employment services for employees.

Alcoa noted that the closure are expected to result in total restructuring-related charges in a range of $0.14 to $0.15 per share in third quarter 2014. It added that about 60 percent of these charges are non-cash.

The move to close the Portovesme Smelter is part of Alcoa's strategy of creating a globally competitive commodity business. The company also targets lowering its position on the world aluminum production cost curve to the 38th percentile by 2016.

In mid-February, Alcoa said it will permanently close its Point Henry aluminum smelter in August and two rolling mills in Australia by the end of 2014. The facilities were found to have no prospect of becoming financially viable.

Alcoa also said in mid-January that it will permanently close the remaining two potlines at its Massena East smelter in New York in the first quarter of the year, as the potlines are no longer competitive. One of three potlines at the facility was permanently closed in August 2013.

AA closed Friday's regular trading session at $16.45, up $0.15 on a volume of 7.60 million shares.