Century ready to invest in Ravenswood plant

Century Aluminum's chief executive said last week his company would be willing to invest up to $100 million in its idled Ravenswood plant, should Century get a viable power agreement from the state Public Service Commission.

Century is currently working with state officials to craft a power arrangement that will help it restart the plant, which closed in 2009.

In filings with the PSC, some parties - including Appalachian Power - have questioned whether Century would be committed to keeping the plant open for more than 10 years after a restart.

The questions were based on a 2009 private appraisal to bolster the company's challenge to the state Tax Department's appraisal of the plant. That appraisal said the Ravenswood plant, built during the 1950s, only had about 10 years of life left to it.

But in a meeting with the Daily Mail editorial board last week, CEO Michael Bless - who took over as CEO in February - said that analysis was based on the company not improving or replacing any of the current equipment.

Bless said the Ravenswood plant has the potential for a long lifespan.

Bless said there are two types of aluminum smelters: Soderberg and prebake. The difference between the two is the type of anode used to conduct electricity in the smelting process.

Soderberg smelters aren't as efficient and can't be modernized. But the Ravenswood plant uses the prebake system that can.

Bless said his company has already invested about $55 million in discretionary spending over the past decade making some improvements to the plant.

He said the company also planned on investing more into the plant, but those plans changed when the recession hit and sent aluminum prices plummeting in 2008.

While aluminum makers across the world are curtailing capacity, Bless says he sees opportunity in the U.S. market over the next half century. He also said there were few projects in the works worldwide to bring new production capacity to the aluminum market.

While domestic aluminum smelters like the one in Ravenswood are over 50 years old, Bless said the management team at Century has learned how to run those plants well.

Bless said the company's customers in the U.S. - primarily in the aerospace, automotive and electrical grid sectors - remain strong. Bless also said that higher fuel standards in the U.S. auto industry could be a boost for business. Aluminum parts are lighter weight than steel and help boost the fuel economy of cars. He also said the $46 million investment in a new aluminum stretcher by Constellium, located adjacent to Century's plant, is also significant.

That's significant because Century is able to directly ship molten aluminum to the Constellium plant. Shipping in the molten form cuts down processing costs for both companies.