Alcoa has approved the next phase of a five-year, $2.1-billion investment plan for its Baie-Comeau, Deschambault and Becancour smelters in Quebec and has signed a memorandum of understanding (MoU) with the government of Angola to explore development of a 750,000-mt/y aluminum smelter using power from hydroelectric facilities under consideration by the government.

The Quebec investment, announced November 7, 2011, is expected move the Quebec smelters down the aluminum cost curve by 13% and to contribute to Alcoa’s goal of achieving an overall 10% improvement in its operations. The plan will also increase production capacity by 120,000 mt/y and reduce greenhouse gas emissions.

The plan includes 25-year power contracts for all three smelters and allows the aluminum smelter in Baie-Comeau to immediately undertake the last engineering phase of its modernization project, with plans to have a new potline in service by the end of 2015. In addition, the preliminary engineering phase of the Deschambault smelter’s amperage increase project will be launched as early as the end of 2011.

As part of the modernization at Baie-Comeau, the older smelting pots using Soderberg technology will be replaced by an all-new electrolysis potline with production capacity of 160,000 mt/y. These enhancements will reduce the plant’s greenhouse gas emissions by 40%. At Deschambault, amperage will increase to 405,000 amperes by 2016, increasing the plant’s annual capacity by 25,000 mt/y.

Alcoa’s MoU with the government of Angola was announced October 27, 2011. Under the agreement, both sides will begin a series of feasibility studies to determine the viability of the aluminum smelter project. The MoU provides for a 12-month exclusivity period to negotiate a power contract and cooperation agreement. If the project moves forward, first metal from the smelter would be produced in 2020.

Angola has significant capacity for developing hydroelectric facilities and intends to use the capacity to attract energy-intensive industries to the country, the Alcoa statement said. The country has committed to allocate 1,300 MW of firm power capacity for the aluminum industry.

“Alcoa is interested in pursuing projects that lower our cost position,” Ken Wisnoski, president of Alcoa’s Growth Group, said. “We believe the Angola government’s proposal to provide hydroelectric power offers great potential, and we are pleased to have the opportunity to work together on feasibility studies.”