Alcoa Gets Energy Supply Deal in Italy - Ministry

MILAN, Dec. 10 -- U.S. aluminium group Alcoa Inc's (AA.N: Quote) and Italian government have reached a deal on energy supplies aimed to keep Alcoa's Italian plants working after a regulatory setback, Italian Economic Development Ministry said.

In November, Alcoa said it would temporarily idle operations at its Italian smelters with a total capacity of 194,000 metric tonnes a year, after the European Commission ordered it to pay back most of the state aid it had received in Italy since 2006.

The government has made "an exceptional commitment" to find "extraordinary instruments" to lower the cost of energy supplies for Alcoa, the ministry which held talks with Alcoa said in a statement on Thursday.

The ministry has not specified those instruments but said they would kick in at the start of January.

Alcoa's management has recognised the government efforts to ensure energy supplies on competitive conditions and has pledged not to suspend the work of its Italian units until the next meeting with the government scheduled for Jan. 7, the ministry said.

It said the agreement has been backed by unions which protested last month against the possible closure of Alcoa's Italian smelters.

Alcoa has set a deadline of Dec. 21 to determine the cost of its power supplies in Italy in 2010. On the basis of that, it would take a decision on whether to stay in Italy.