Campaign to reopen Alcoa Intalco Works smelter receives boost following hike in aluminium price

In April 2020, Alcoa announced the suspension of its Ferndale smelter in Washington, following diminishing demand and dropping metal prices. However, war-related sanctions on Russia that had caused aluminium spot price to reach a record high, has boosted the reopening campaign of the Alcoa Intalco Works aluminium smelter.

The new owners of the idled Alcoa Intalco Works smelter in Ferndale, Washington, have received $10 million in government funding to restore the decades-old facility. The smelter, on the other hand, consumes a lot of energy to run. And it is now the main issue. A proposal for reduced-rate power to operate the large plant was denied by the Bonneville Power Administration due to high stakes. The restarting of the smelter has suffered a setback, as policymakers are worried about the value of domestic production and how the region's scarce, low-cost hydropower should be distributed.

The case for restarting the smelter centres is not simply around restoring local manufacturing capacity and family-wage employment, but also around pioneering "green" aluminium production. Local and state officials have repeatedly stated that the revived Ferndale smelter will be able to distinguish itself as a "sustainable," environmentally friendly aluminium producer thanks to a combination of zero-emissions Northwest hydropower and plant upgrades that will significantly reduce air pollution.

According to Washington State Labor Council President Larry Brown, the final obstacle to bringing 700 high-paying smelter employment back to Whatcom County is a cheap long-term electricity deal. Labour leaders, government authorities, and the potential buyer of Intalco, Blue Wolf Capital, are now focusing their efforts on persuading the BPA to rethink. While sympathetic to the cause, a BPA spokeswoman said Thursday that the company does not have enough available electricity to sell, nor can it match the requested price.

Washington Gov. Jay Inslee signed an enhanced state-building budget into law on Thursday, March 31. A $10 million line item in that budget is dedicated to improving the efficiency and pollution reduction of the potlines at the Intalco smelter. The law justified the government's investment by stating that the plant renovations will significantly lower the smelter's greenhouse gas emissions, by at least 750,000 tonnes per year.

"We can't do that and we've relayed that information to them," said Doug Johnson, agency senior spokesman.

They buy electricity from BPA and are encouraging the government agency to stick to its guns. Scott Simms, executive director of the Portland-based Public Power Council, contended that if any more low-cost federal hydropower is available, the region's public utilities have the first right of refusal. BPA's "sweetheart bargain" to restart the Ferndale smelter, according to Simms, was unacceptable.

“It would be illegal and unjust. We cannot support the request of this private equity investment firm to acquire and restart Alcoa’s Intalco aluminum smelter at the expense of citizens and other businesses who would essentially subsidize that new venture,” added Scott Simms.

“The prospect of reopening the former Intalco facility in Ferndale is a vital opportunity — not only for the jobs and economic opportunity it represents for northwest Washington but as a sign of our national commitment to enhancing America’s competitiveness and investing in clean manufacturing technology. It is my sincere hope that the day is not far off when this revitalized facility can reopen, in part through continued constructive discussions with BPA.” Gov. Inslee wrote in a letter to BPA Administrator John Hairston, one of a bunch of similar missives the federal power marketing agency received.

In an interview with public radio, Whatcom County Executive Satpal Sidhu expressed his difficulty regarding Blue Wolf Capital's inability to get reasonable power for the energy-intensive smelting process. BPA informally addressed how it would give a fraction of the smelter's requested electricity at market pricing, according to Johnson. To run at full capacity, the smelter would need to construct a "portfolio" of different electrical sources. According to Johnson, the smelter's electric consumption is about comparable to 40% of the average demand of all Seattle consumers.

"It's like 50% less. Such a large electrical consumer needs a favorable rate to be able to be viable. We're continuing to talk. We'd like to see Blue Wolf succeed in their efforts to reopen the plant and bring jobs to the Northwest,” added Johnson.