Alcan modernization plans move forward

"The modernisation of our Kitimat smelter is truly a transformational project, in line with our strategic objective to grow via long-life, large-scale, low-cost assets. Once completed, Kitimat will be one of the lowest-cost smelters in the world." -- A portion of a media release from Rio Tinto Alcan today, outlining some of the background related to their spending plans detailed today.


It's not quite the BIG Announcement that Kitimat residents are hoping for, but it's a step towards the much anticipated modernization project for Rio Tinto Alcan's Kitimat works site.

This morning Alcan released details of some 758 million dollars in capital spending, the majority of which is destined for the Saguenay region of Quebec, however Kitimat will benefit from 300 million in preparation spending, designed to set the stage for the eventual start of their modernization of the Alcan works industrial area.

That project, which if approved by the Rio Tinto board in 2011 is estimated to  be a 2.5 billion dollar industrial development that would make the Alcan smelter among the most efficient ones in the world.

According to the press release issued today, that modernization project will increase the smelter's current production by more than 48%, reduce emissions by 50 per cent per year and will be powered exclusively by hydroelectricity.

Rio Tinto Alcan recently closed a number of pot lines at the plant in order to prepare the site for the anticipated modernization project.

The final decision on the project is expected to be delivered next year, an announcement that should provide a blue print of the company's plans for it's smelter and give Kitimat residents a bit more details as to the company's future plans.

With Kitimat having suffered a number of economic blows in the last few years, the turning of the calendar to 2011 could be a most anticipated event as they await further news on the city's largest employer and mainstay of the local economy.

We will add background to the developments as they appear in local media sources.

Terrace Standard-- Rio Tinto pours another $300 million into Kitimat
Globe and Mail-- Rio Tinto eases back into spending in Canada
Vancouver Sun-- Ro Tinto to invest US$300M in Kitimat aluminum smelter modernization
National Post-- Rio Tinto Alcan announces expansion plans

Can Kitimat escape cutbacks at Rio Tinto Alcan?

Rio Tinto, one of the world's largest producers of aluminum has announced a number of high profile closures, shutdowns and cutbacks worldwide this week, a reflection of the troubled times across the globe in the resource based industries particularly in the world of minerals. Rio Tinto Alcan is not alone in its troubles, as Alcoa recently announced huge layoffs to its operations as the situation worsened in the resource sector.

This week the axe fell in Quebec, where the company closed a smelter and reduced output of another processing operation while at the same time letting go a number of employees employed in that province, those closures have sent some shock waves through other Quebec communities that host Alcan operations in the province, with many if not all wondering if they might be next .

As the bad news rolled across the time zones from the South Pacific to Brazil , through Quebec and on to BC, residents of Kitimat wondered if they too would be sharing in the Alcan pain through further cuts from the Rio Tinto head offices.

By Tuesday, it appeared that they were in the clear for now, but today Opinion 250 out of Prince George is reporting of rumours in the aluminum city that suggest that job cuts and reorganization may also be part of the future for Kitimat.

No hard numbers were outlined, but suggestions of more corporate financial setbacks and further workforce cutbacks, will loom large on the economy of the Northwest and Kitimat in particular.

The fall out from the continuing downward slide of the aluminum industry could also very well have a huge impact on the fate of the Kitimat modernization program, as Rio Tinto continues to struggle with its world wide operations.

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Kitimat will no doubt be keeping an eye on the business channels and keeping the business section of the newspapers handy, just to stay in the loop.