For Alcan its one step forward and then another one back.

Two interesting stories at seemingly cross purposes to each other today, all part of the ever entertaining Alcan vs. Kitimat grudge match.

Alcan and its union this week have reached a tentative contract agreement for the 1300 production and maintenance workers at the smelter in Kitimat. It has been Called a transition agreement, which is designed to ensure labour stability while construction to modernize the smelter takes place.

While they toasted each others wise decisions regarding labour stability however, a darker cloud seemed to pop up on the horizon. With Alcan and Kitimat seeming to enter another phase of their bitter war of words over the state of the smelter in the city.

The latest from the company has a senior official; Michel Jacques, ruminating about taking his smelter and moving further up Highway 37 to a more welcoming community.

A community which went un-named, but perhaps begins with a T and rhymes with stress (which would be an understament in Kitimat if it came to pass). Though we wonder how they might get those huge freighters close to any smelter built further inland, it may take a fair amount of dredging on the Skeena to pull that one off.

Perhaps the next phase of the where to build the new plant will feature Prince Rupert. Mr. Jacques will have to turn left at Highways 37 and 16 for further welcoming communities, after all we’ve been welcoming before.

In the past Prince Rupert has been tapped as the potential destination of choice for Steel Mills, LNG plants and sulphur terminals in the past, so why not throw an Aluminum smelter into the mix and wait for the inevitable crush of rumours to start here on the north coast.

From the Vancouver Sun and the Terrace Standard, two stories of the continually fluid Alcan situation in the Northwest.

Alcan clears another hurdle in plan to upgrade Kitimat smelter in B.C.

Vancouver Sun
Canadian Press
Tuesday, May 01, 2007

KITIMAT, B.C. (CP) - Alcan Inc. (TSX:AL) and the Canadian Auto Workers have reached a tentative contract agreement for 1,300 production and maintenance workers at the company's aluminum smelter in Kitimat, B.C.

The deal is a "transition" agreement which will ensure labour stability while construction to modernize the 55-year-old smelter goes on until 2011, the union said in announcing the deal Tuesday.

Along with setting the stage for investment in the smelter, the agreement "establishes gains on key issues such as wages, benefits, quality of work life issues, job security, health benefits for current and future retirees, and transition issues" related to new technology, the union said.
Details weren't disclosed. Local CAW members will hold a ratification vote Wednesday.

Alcan has been steadily reducing its workforce in Kitimat, currently at 1,550, down from 2,500.
Modernization of the smelter would increase its production by more than 60 per cent, the company said, from its current 245,000 tonnes per year to about 400,000 tonnes per year, however it would also reduce the employee count further to about 1,000.

The agreement with the union comes as Alcan closes in on a deal with the B.C. government and B.C. Hydro that will allow the aluminum producer to proceed with the $2-billion smelter upgrade.

Late last year, the B.C. Utilities Commission refused to ratify a long-term power purchase agreement between B.C. Hydro and Alcan Inc. because the utility made a mistake in its calculations and failed to prove the benefits would offset the costs.

The regulator's approval of the agreement between the utility and aluminum producer was one of three conditions set by Alcan for the final go-ahead of the upgrade.

The tribunal said in reasons for its ruling that B.C. Hydro made a mistake in the price that it used as a benchmark to establish the cost effectiveness of the agreement and failed to show the benefits of the deal would offset additional costs.


Alcan remains reluctant to pull Kitimat smelter plug
The Terrace Standard
May 02 2007

A SENIOR ALCAN official says he isn’t ready yet to give up on Kitimat and perhaps consider moving the company’s planned $2-billion aluminum smelter project up Hwy37 to a more welcoming community.

But Michel Jacques, in speaking last week, says he is disappointed in Kitimat council’s decision to keep alive the possibility it might appeal a supreme court decision which gave Alcan the green light to sell all of the power it wants from its Kemano hydro-electric generators if it so chooses.
Kitimat council, which began the court action that lead to that ruling, had wanted a decision backing its position that Alcan should use all of its Kemano power to generate aluminum and not sell a portion of it to BC Hydro.

Alcan says it does want to modernize its Kitimat smelter but also needs to sell a portion of the power it generates at Kemano.

For now, Montreal-based Jacques said he still wants the new smelter to be located on the site of the current one in Kitimat.

But he said it isn’t helpful that the community’s council “puts rocks and stones on the road.”
“We’re still not sitting on the same side of the table,” said Jacques.

Jacques was also referring to the District of Kitimat’s release of what it calls negotiating points for the smelter project to go ahead.

The district says Alcan should commit to a minimum electrical load for its new smelter plan, should sell excess power to industries and municipalities in the northwest at a reasonable rate, should sell residential power to native communities in the northwest and should pay taxes on its Kemano generating facilities.

Jacques called those “additional hurdles” and said he thought the council and his officials were having constructive discussions.

“We’re not in the negotiating mode with the District of Kitimat,” said Jacques. “We’re not asking for anything from the District of Kitimat. We’re offering to invest $2 billion.”

But although Jacques expressed his disappointment in Kitimat council several times, he didn’t provide any kind of timeline as to when his company needs that council’s blessing or face losing the project altogether.

And he did acknowledge that Alcan really doesn’t need to discuss its smelter plans with Kitimat council at all but does so to keep good relations.

“We respect the elected officials of the communities,” Jacques said.

For his part, Skeena NDP MLA Robin Austin favoured Kitimat’s four points.
He particularly like the idea of having Alcan sell electricity at reasonable rates to northwestern municipalities and businesses, adding that Terrace mayor Jack Talstra has been talking up something similar.

“Excellent idea,” said Austin.

“I think it’s not just Jack Talstra but there are probably a number of municipalities in the region who would be in favour of obtaining electricity at a fair price.”

Austin also said it is reasonable for Alcan to pay taxes on its Kemano generating facilities.
“The deal Alcan got in the 1950s for water, land and tax exemptions is not the kind of deal anyone could hope to receive today,” he said.