Alcoa to curtail San Ciprián Aluminum Smelter in Spain

Alcoa announced it will curtail its San Ciprián aluminum smelter in Spain. The company will also initiate a collective dismissal that will impact about 530 employees. The alumina refinery at San Ciprián will continue to operate.

The curtailment is expected to be completed in the first quarter of 2021, and approximately 100 employees will remain to operate a portion of the casthouse.

The company will offer severance packages and employment services for those affected by the curtailment decision.

The decision was made after considering all options, including reviewing records associated with four months of consultations with the workers’ representatives and the negotiations during a potential sale process.

Alcoa on September 29 announced it would take up to 15 days to determine and announce a decision regarding the smelter’s 228,000 metric tons of annual capacity.

 “As we’ve shared with our stakeholders throughout this process, the unfortunate reality is that the San Ciprián smelter is uncompetitive, and we do not expect its significant structural issues to change,” said Alcoa President and CEO Roy Harvey.

“While we have explored several options in the past months, curtailment is necessary to stop the continuing economic losses. We understand that this is a difficult outcome, and we are committed to minimizing the impacts on our employees as we work together to safely curtail the site and continue to meet all regulations.”

“Continued operation of the smelter is not viable due to permanent factors such as an uncompetitive energy framework in Spain, global overcapacity in aluminum production and depressed prices. Year to date, the aluminum plant incurred a net loss of approximately $45 million through September 30,” Alcoa said.

Alcoa expects restructuring charges of approximately $35 million to $40 million (pre- and after-tax), or $0.19 to $0.22 per share, in the fourth quarter of 2020 for employee-related costs.