Alcoa Announces Curtailment and Collective Dismissal at San Ciprián Aluminum Smelter in Spain
Alcoa (NYSE:AA) is set to curtail operations at its San Ciprián aluminum smelter in Spain, impacting around 530 employees. This decision follows extensive consultations and reflects the smelter's uncompetitive position due to factors like high energy costs and global aluminum overcapacity. The curtailment will be completed by Q1 2021, with ongoing operations for about 100 employees in the casthouse. Alcoa anticipates restructuring charges of $35 million to $40 million in Q4 2020. Year-to-date losses at the plant total approximately $45 million, contributing to a cumulative loss of $126 million in 2018 and 2019.
- Alcoa will offer severance packages and employment services for affected employees.
- The alumina refinery at San Ciprián will continue operations, providing some stability.
- The smelter has incurred a net loss of approximately $45 million year-to-date.
- The San Ciprián smelter had a combined net loss of $126 million in 2018 and 2019.
- Restructuring charges are expected to be between $35 million and $40 million, impacting Q4 earnings.
PITTSBURGH--(BUSINESS WIRE)--Alcoa (NYSE:AA) will curtail its San Ciprián aluminum smelter in Spain and initiate a collective dismissal that will affect approximately 530 employees.
On October 8, Alcoa made the decision after considering all options, including reviewing records associated with four months of consultations with the workers’ representatives and the negotiations during a potential sale process. On September 29, 2020, Alcoa announced that the Company would take up to 15 days to determine and announce a decision regarding the smelter’s 228,000 metric tons of annual capacity.
The smelter’s curtailment is expected to be complete in the first quarter of 2021, and approximately 100 employees will remain to operate a portion of the casthouse.
“As we’ve shared with our stakeholders throughout this process, the unfortunate reality is that the San Ciprián smelter is uncompetitive, and we do not expect its significant structural issues to change,” said Alcoa President and CEO Roy Harvey. “While we have explored several options in the past months, curtailment is necessary to stop the continuing economic losses. We understand that this is a difficult outcome, and we are committed to minimizing the impacts on our employees as we work together to safely curtail the site and continue to meet all regulations.”
Continued operation of the smelter is not viable due to permanent factors such as an uncompetitive energy framework in Spain, global overcapacity in aluminum production and depressed prices. Year to date, the aluminum plant incurred a net loss of approximately
Alcoa will offer severance packages and employment services for those affected by the curtailment decision. Associated with today’s announcement, Alcoa expects restructuring charges of approximately
The alumina refinery at San Ciprián was not included in the consultation process and will continue to operate.
About Alcoa
Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina, and aluminum products, and is built on a foundation of strong values and operating excellence dating back more than 130 years to the world-changing discovery that made aluminum an affordable and vital part of modern life. Since developing the aluminum industry, and throughout our history, our talented Alcoans have followed on with breakthrough innovations and best practices that have led to efficiency, safety, sustainability, and stronger communities wherever we operate. Visit us online on www.alcoa.com, follow @Alcoa on Twitter, and on Facebook at www.facebook.com/Alcoa.
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