(RTTNews) – Alcoa Corp (AA) said it had reached an agreement with workers’ representatives to reduce aluminum smelting at its San Ciprián aluminum plant in Spain for two years, due to rising prices. energy in Europe. The curtailment activities will begin on January 1, 2022, with the objective of being completed before the end of January 2022. The company has committed that no collective redundancy procedures will be considered for the San Ciprián smelter until December 31, 2025 at the earliest.
Alcoa expects to record restructuring-related charges in the fourth quarter of 2021 of approximately $60 million or $0.32 per share, with approximately half of the costs to be paid in 2022 and 2023.
The agreement includes a two-year reduction in the smelter’s 228,000 metric ton annual capacity and a commitment from the company to begin restarting the smelter in January 2024.
During the restraint period, Alcoa will seek to enter into long-term power purchase agreements as soon as possible, starting in 2024. The company has also committed $68 million for capital investments and $35 million for restart costs. As part of the agreement, workers will immediately end strike action that has affected both the aluminum smelter and the alumina refinery.
In addition, the company has pledged to provide employees with full wages and benefits during the two-year reduction period, to extend contractor company contracts through 2024, and to provide a new collective agreement which includes wage increases extending until the end of 2025. .
As a result of the curtailment and settlement, Alcoa expects the San Ciprián aluminum smelter to post an annual pretax net loss of approximately $20-25 million in 2022. In 2021, the aluminum plant is expected to post a net loss before taxes. of approximately $65 million, with most of the impact in the fourth quarter being based on higher electricity prices. The average price of electricity on the spot market for the month of December 2021 in Spain is $276 per megawatt hour.
During the shutdown, the smelter will continue to operate and the San Ciprián alumina refinery will continue to operate normally, Alcoa said in a statement.
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