Lightweight metals leader Alcoa (NYSE:AA) today announced that it has entered into a three-and-a-half year agreement with New York State to increase the competitiveness of the Massena West smelter.
The Company had previously announced plans to curtail the facility amid prevailing market conditions. The agreement will help maintain hundreds of jobs in New York’s North Country, improve the cost position of the smelter and support growth projects for the casthouse.
“Senator Schumer and Governor Cuomo have been tremendous allies for Alcoa’s Massena operations for many years and we thank them for their continued support,” said Chairman and Chief Executive Officer Klaus Kleinfeld. “Today’s agreement helps better position the smelter in light of prevailing market conditions, providing this facility a bridge to a stronger commodity market and maintaining jobs in the North Country. We remain focused on ensuring our Upstream business is well-positioned to succeed throughout the cycle.”
New York State’s incentive package will help maintain approximately 600 jobs at the Massena West facility through the term of the agreement. The plant has 130,000 metric tons of smelting capacity.
With the Midwest transaction aluminum price down 30 percent year-to-date, Alcoa will continue with its other previously announced curtailments of uncompetitive smelting and refining capacity. Once the curtailments are complete, Alcoa’s smelting capacity will be reduced by 373,000 metric tons. The reductions will further improve the cost position of the Upstream business and ensure competitiveness in a lower pricing environment.
Alcoa has been aggressively reshaping its Upstream portfolio as part of a successful multi-year strategy to position itself as a low-cost global leader in alumina and aluminum production. The Company is on track to meet its 38th percentile target on the global aluminum cash cost curve in 2016.
Revised total restructuring-related charges in the fourth quarter of 2015 associated with actions announced in November will be between $130 million and $150 million after-tax, or $0.10 to $0.11 per share, of which approximately 40 percent would be non-cash.