Rio Tinto Alcan announced Wednesday that it will shut down its aluminum smelter plant in Shawinigan 13 months earlier than originally planned.
The Shawinigan electrolysis plant plant will now be shut at the end of November 2013, rather than on December 31, 2014, as originally planned and only 60 of the 425 plant workers will continue on with the company after the shutdown of the plant, which opened 71 years ago.
“This decision follows a major strategic review that allowed us to analyze all options for the future of the plant. The technology and low aluminum prices mean that the situation of the Shawinigan plant is currently unsustainable.” wrote President and CEO of Rio Tinto Alcan Arnaud Soirat in a statement.
“We will work with our key stakeholders to manage the impact caused by the reduction of production in the most respecful manner possible," he stated.
The statement added that the affected employees will be given support with vocational training and job searches.
Shawinigan Mayor Michel Angers expressed disappointment with the news and complained that the company was breaking a “social contract,” it has with the municipality.
He said, however, that the city has been trying to engineer a reconversion of the site, but wouldn’t offer details of the project.
Workers’ union president Louis-Gérard Dallaire described the news as a hard blow to the workers, and the city but said that certain clauses in the union contract would alleviate some of the pain.
He said that an employment committee had been set up in 2012 that could help workers find work after the closure.
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.