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Alcoa to Temporarily Curb Aluminum Output in Italy

Industry News 08:59:41AM May 12, 2010 Source:SMM

NEW YORK, May 12 -- Alcoa Inc (AA.N: Quote) will temporarily curtail aluminum production at one of its Italian smelters as part of a plan to keep its facilities operating in the country, a company spokesman said on Tuesday.

"We will begin the action soon at Fusina," spokesman Kevin Lowery said of the facility near Venice.

He also told Reuters there were positive signs from the European Union over resolving an electric power issue that prompted the U.S. aluminum company last year to threaten to idle its two smelters in Italy.

Alcoa's plan for the Fusina smelter is aimed at avoiding substantial losses but does not foresee layoffs since workers will either be assigned to smelter maintenance or transferred to the associated rolling mill. In addition, some workers are expected to take voluntary early retirement.

"We are trying to minimize the impact on workers in Fusina," said Lowery.

Alcoa's plan, presented on Monday at a meeting in Rome with Italian government and union representatives, also calls for investment and structural action to revitalize operations at the Portovesme smelter on the island of Sardinia.

A senior Italian Alcoa executive told employees the meeting was positive in its primary objective to keep Alcoa in Italy.

Last November, Alcoa said it would temporarily idle its 194,000-tonne-per-year smelters at Portovesme and Fusina after the European Commission ordered it to pay back most of the state aid it had received in Italy since 2006. Alcoa has complained about high power prices in Italy.

In March, Italy's parliament approved a power decree offering favorable conditions to some industrial consumers to convince Alcoa to keep its Italian plants working.

Lowery confirmed Italian reports that the company plan would cost about 60 million euros ($76.8 million) over three years.

He also said there were signs the EU Commission's evaluation of the Italian power decree was positive even though Alcoa is still waiting for official word.

EU approval is essential for the economical sustainability of the Portovesme smelter as well as for the achievement of a competitive energy price for three years, which are required conditions to keep the plant operational, Alcoa says.

Alcoa stock fell 45 cents, or 3.58 percent, to close the day at $12.13 on the New York Stock Exchange.


 

Alcoa to Temporarily Curb Aluminum Output in Italy

Industry News 08:59:41AM May 12, 2010 Source:SMM

NEW YORK, May 12 -- Alcoa Inc (AA.N: Quote) will temporarily curtail aluminum production at one of its Italian smelters as part of a plan to keep its facilities operating in the country, a company spokesman said on Tuesday.

"We will begin the action soon at Fusina," spokesman Kevin Lowery said of the facility near Venice.

He also told Reuters there were positive signs from the European Union over resolving an electric power issue that prompted the U.S. aluminum company last year to threaten to idle its two smelters in Italy.

Alcoa's plan for the Fusina smelter is aimed at avoiding substantial losses but does not foresee layoffs since workers will either be assigned to smelter maintenance or transferred to the associated rolling mill. In addition, some workers are expected to take voluntary early retirement.

"We are trying to minimize the impact on workers in Fusina," said Lowery.

Alcoa's plan, presented on Monday at a meeting in Rome with Italian government and union representatives, also calls for investment and structural action to revitalize operations at the Portovesme smelter on the island of Sardinia.

A senior Italian Alcoa executive told employees the meeting was positive in its primary objective to keep Alcoa in Italy.

Last November, Alcoa said it would temporarily idle its 194,000-tonne-per-year smelters at Portovesme and Fusina after the European Commission ordered it to pay back most of the state aid it had received in Italy since 2006. Alcoa has complained about high power prices in Italy.

In March, Italy's parliament approved a power decree offering favorable conditions to some industrial consumers to convince Alcoa to keep its Italian plants working.

Lowery confirmed Italian reports that the company plan would cost about 60 million euros ($76.8 million) over three years.

He also said there were signs the EU Commission's evaluation of the Italian power decree was positive even though Alcoa is still waiting for official word.

EU approval is essential for the economical sustainability of the Portovesme smelter as well as for the achievement of a competitive energy price for three years, which are required conditions to keep the plant operational, Alcoa says.

Alcoa stock fell 45 cents, or 3.58 percent, to close the day at $12.13 on the New York Stock Exchange.