Rio Tinto Alcan to close Shawinigan, Que., smelter, affecting 425 workers

Rio Tinto Alcan (NYSE:RIO) says its 72-year-old aluminum smelter in Shawinigan, Que., will close a year ahead of schedule in November, affecting 425 workers.

The announcement was made Wednesday, ahead of environmental regulations that would have forced the facility to close at the end of next year.

The Montreal-based company says it will immediately curtail 50,000 tonnes of production and progressively cut the remaining 50,000 tonnes four months later.

“This decision follows a strategic review that explored every option for continuing smelting operations; due to dated technology and continued weakness in aluminium prices, Shawinigan’s primary aluminium capacity is not currently sustainable,” stated Arnaud Soirat, chief executive officer of Rio Tinto Alcan Primary Metal.

Chief operating officer Etienne Jacques announced the decision at a news conference in the Saguenay community that is an important part of Canada’s industrial history.

“We will work with our key stakeholders to ensure that we manage any impact caused by this curtailment has in the most sensitive and respectful way,” he said in a news release.

Rio Tinto Alcan said it will provide impacted employees with re-training and job-search assistance.

About 276,000 tonnes of aluminum capacity had been scheduled to be removed when the metal giant’s division was slated to close facilities in Shawinigan and Arvida, Que., by the end of 2014. That will be offset by the addition of 60,000 tonnes with the impending opening of a facility using AP60 technology.

An expansion in Kitimat, B.C., will increase production to 420,000 tonnes from the current 187,000-tonne output.

Rio Tinto Alcan suspended two lines of production at the Shawinigan smelter after a major power outage at the end of 2011 forced the closure of two of the plant’s four production lines.

The process of gradually restarting the 280 cells that were shut down was completed in the second quarter of 2012.

Commissioned in 1941, the smelter uses Soderberg technology, which is to be phased out of all Quebec primary aluminium smelters by Dec. 31, 2014 in compliance with Quebec environmental regulations.

Rio Tinto and rival Alcoa have been looking to curtail the higher costs of aluminum production as it adjusts to low metal prices.

London-based Rio Tinto is also looking to sell its Pacific smelters which have 1.6 million tonnes of capacity. The company is set to announce its latest financial results results on Thursday.