Noranda expects third rod mill to be completed by end of 2015

Noranda Aluminum will complete a third redraw rod mill at its New Madrid, Missouri facility by the end of 2015, chief executive Kip Smith said in a conference call on Wednesday to discuss the company's fourth-quarter 2014 earnings.

Noranda said in November it had suspended construction on the mill, which the company had previously expected to begin production by the second quarter of 2015, after its request for an electricity rate cut was denied.

The third rod mill will increase Noranda's redraw rod capacity to 220 million pounds annually, up more than 40 percent from its current capacity of 155 million pounds, the company said in its 2013 annual report. Spokesman John Parker confirmed those figures were still accurate.

Redraw rod, used to make electrical wire and cable, accounted for 28 percent of Noranda's sales in 2013, its second-largest category after extrusion billet. The company said in its 2013 report that it had obtained customer commitments for 220 million pounds.

Noranda has continued to pursue negotiations for a lower electricity rate, and the case is expected to be decided by May 2015, Smith said on Wednesday's call.

Chief financial officer Dayle Boyles added that higher aluminum prices last year, primarily due to an increase in the average Midwest premium AL-PREM to 19 cents a lb in 2014 compared to 11 cents a lb in 2013, boosted the company's earnings.

The rise in premiums to record highs is widely attributed to prolonged logjams at London Metal Exchange warehouses due to financing deals that have drawn scrutiny from lawmakers and regulators.

In the call, Smith said he expected the premium to remain high in 2015, noting that the main driver was robust demand due to strength in the United States economy.

"We are a U.S.-based company, selling to U.S.-based customers," Smith said.