Alcoa injects $1 billion in to Baie-Comeau smelter

Alcoa (AA-N) has tabled plans for a $1-billion investment in its smelter at Baie-Comeau, Quebec.

Under a deal with the government of Quebec, the U.S.-based aluminum giant will inject the billion dollars over eight years, and increase annual production from the current 437,000 tonnes to 547,000 tonnes.

Alcoa plans to replace its current Soderberg production technology with a modern pre-bake technology, which will significantly improve reduce the plant’s polycyclic aromatic hydrocarbon and greenhouse gas emissions.

Alcoa says the program will create 5, 850 direct and indirect jobs over the 8 years. The smelter currently employs 1,800 people. Alcoa has agreed to employ at least 1,476 workers at the smelter. The agreement includes stiff penalties if the commitment isn’t met.

For its part, the Quebec government will provide a $170-million interest-free loan, and the project has been granted a 10-year corporate tax break.

The agreement also calls for Hydro-Quebec to provide preferential corporate rates for 175 megawatts of electricity. The government has also agreed to renew, for an additional 25 years beginning in 2011, the water rights for the McCormick hydro-electric plant, which provides part of the Baie-Comeau smelter’s energy supply.

Work is slated to begin by the end of 2003, and the new facilities are expected to gear up by 2010.