Alcoa to Curtail Remaining Suralco Refining Capacity
Alcoa recently announced the curtailment of Suralco’s remaining 887,000 metric tons per year of alumina refining capacity as discussions continue with the government of Suriname on preserving the country’s bauxite and refining industry. The refinery is scheduled to be idled by November 30. The curtailment and ongoing discussions are aligned with Alcoa’s strategy to create a globally competitive commodity business. Discussions between Alcoa and the government of Suriname began in October 2014 to reach a joint solution for Suralco, which has faced expiring bauxite reserves and the lack of a long-term energy solution.
“Suralco’s ongoing energy challenges and limited bauxite supply, combined with unfavorable market conditions, mean it is no longer possible to continue operations,” said Bob Wilt, president. “Our immediate attention now turns to the employees of Suralco, who have worked hard during these challenging times. We understand how difficult this decision is for employees and we will work closely with them and our unions, government and community stakeholders during the transition.”
Total restructuring-related charges in the second half of 2015 associated with the curtailment are expected to be between $65 million and $75 million after-tax and non-controlling interest, or $0.05 to $0.06 per share, with approximately 50% being recorded in the third quarter. Approximately 80% of the charges are non-cash.
The curtailment follows Alcoa’s March 2015 announcement to evaluate 2.8 million metric tons of refining capacity for possible curtailment or divestiture. Alcoa’s review of its refining operations is consistent with the company’s 2016 goal of lowering its position on the world alumina cost curve to the 21st percentile.
For more information, visit www.alcoa.com.