Author: Paul Ploumis27 Mar 2015 Last updated at 07:25:05 GMT
ALBANY (Scrap Monster): The US Department of Energy (DOE) has made conditional commitment to issue loan to Alcoa in support of expanding its sheet manufacturing facility in Tennessee. The commitment is viewed as the first step towards issuing a final loan of $259 million to Alcoa. Final approval of the $259 million loan is subject to completion of additional steps mentioned in the agreement.
The funds will finance most of the costs of a $275 million expansion project already under way at the plant, where Alcoa is converting capacity previously used for making aluminum cans to produce high-strength aluminum for automakers.
Alcoa Chairman and CEO Klaus Kleinfeld said the loan program could "encourage a greater shift to aluminum intensive vehicles that are safer, lighter and more fuel-efficient." The company expects the loan to help it create 200 permanent, full-time jobs.
This is the first conditional commitment issued by the DOE under the Advanced Technology Vehicles Manufacturing loan program in four years. The agency had lent more than $8 billion to automakers before. However, the grant of low-cost government funds was put on freeze following the collapse of Fisker which had won a $529 million loan commitment under the program. Fisker had filed for bankruptcy in 2013. According to DOE estimates, $139 milli9on in loan was lost on the loan agreement with Fisker.
Since 1913, Alcoa's Tennessee Operations has produced thousands of different products for the construction, aerospace, military, consumer and other markets. Today, Tennessee Operations is dedicated solely to the production of high quality molten metal and aluminum sheet for beverage cans and is a recognized world leader in the business. It is one of the most modern aluminum fabricating facilities in the world and is part of Alcoa's Global Packaging Business.
