Alcoa announced in late March it is curtailing 147,000 mt/y of smelting capacity at its São Luís (Alumar) and Poços de Caldas smelters in Brazil due to challenging global market conditions in primary aluminum and increased costs that have made the smelters uncompetitive. The curtailments are expected to be complete by the end of May.
In 2013, Alcoa curtailed 97,000 mt/y at São Luís and 34,000 mt/y at Poços de Caldas. Another 85,000 mt/y is being curtailed at São Luís, and the remaining 62,000 mt/y of capacity at Poços de Caldas is being taken offline, resulting in full curtailment of its three potlines.
As a result of the Poços de Caldas smelter curtailment, the facility’s alumina refinery will also reduce production. The mine, aluminum powder plant, and casthouse will continue normal operations, as will the alumina refinery at São Luís. Other Alcoa operations in Brazil are not affected.
Alcoa owns 100% of the Poços de Caldas smelter. The São Luís smelter is owned 60% by Alcoa Alumínio and 40% by BHP Billiton.
Bob Wilt, president of Alcoa Global Primary Products, said, “Across the globe, we are taking measures to curtail high-cost smelting capacity that is not competitive and to reshape our cost profile. These are difficult but necessary actions in support of Alcoa’s strategy to lower the cost base of our upstream businesses.”
In May 2013, Alcoa placed 460,000 mt of smelting capacity under review. In February 2014, the company announced that it is permanently closing its Point Henry aluminum smelter and two rolling mills in Australia (E&MJ, March 2014, p. 6). Once all of its announced curtailments and closures are complete, Alcoa will have approximately 800,000 mt, or 21%, of its smelting capacity off line.