Low reservoir levels are threatening to force Alcan (AL-T), the world’s second-largest aluminum maker, to make further cuts to production in British Columbia.
The company says that it will not be sure of the situation until late June or July. Spring runoff has arrived later than usual in British Columbia this year.
“If the reservoirs don’t fill up, we are going to be facing a crisis situation,” Emery LeBlanc, president of Alcan’s primary metal group, told analysts on a tour of the company’s new Alma smelter in Quebec.
Alcan has already had to reduce primary metal output by 40,000 tonnes over a 16-month period in British Columbia.
A similar situation exists in Brazil, where authorities have asked major power users to decrease consumption by 18% for a six-month period. The move will mean a 2,000-tonne drop in Alcan’s production over the period. The company generates a small portion of its own power at its two Brazilian smelters, which churn out 108,000 tonnes of primary aluminum annually.
Alcan notes that there are no power supply problems in Quebec, where its smelters have a combined production capacity of 1 million tonnes. Its new US$2-billion, 400,000-tonne smelter in Alma has the potential to be expanded by a further 135,000 tonnes. The company expects the smelter, which began production last fall, to gear up to full steam sooner than the original estimate of September. Alma is expected to produce 270,000 tonnes aluminum this year.
Be the first to comment on "Alcan facing more cutbacks"