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Alcoa to Curtail Eastalco Smelter If Power Agreement Can't Be Reached; Company Continues To Work With Government Officials to Seek Power Solution to Save Jobs of More Than 600 Employees
PITTSBURGH--(BUSINESS WIRE)--Oct. 13, 2005--Alcoa (NYSE:AA) today announced it has issued notices to more than 600 employees at its Eastalco aluminum smelter in Frederick, Maryland that the plant will be curtailed if a new competitive power supply cannot be secured within the next two months. The company continues to work with government officials and others seeking ways to secure power for the 195,000 metric ton per year (mtpy) smelter.
Eastalco has been operating under a power arrangement from Allegheny Power, but that contract is scheduled to expire on December 31, 2005. The current rates paid by Eastalco are approximately 40 percent higher than the global smelting average paid for electricity. Discussions with power providers in the Pennsylvania, New Jersey and Maryland (PJM) market area which services Eastalco are suggesting retail market rates that would increase Eastalco's rates to more than three times the global average.
The company is now working with government officials on other options, including possible legislative actions that could provide a short-term solution until a longer-term arrangement can be finalized.
If a power solution is not reached, costs associated with the curtailment would be included in Alcoa's 2005 fourth quarter results.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 131,000 employees in 43 countries and has been named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com