Utility deal's approval key to reopening Century aluminum plant

Reopening the Century Aluminum plant in Ravenswood will depend on whether the West Virginia Public Service Commission approves a deal with electricity suppliers to give the plant lower rates, company president and chief executive officer Michael A. Bless said Tuesday.

That process is expected to take at least four months, and if approved late this summer, it could take an additional four months to prepare the plant for reopening.

Savings from lower electricity prices, Bless said, are key to restarting the plant and to creating savings used "to fund a trust for the retirement group. ... We can pay [those benefits] out of the plant's cash flow as long as the plant is operating."

During a telephone conference call with company investors, Bless said, "Ravenswood shows that it is neither easy nor costless to shut and reopen these plants.

The conference call was meant to share Century Aluminum's first quarter financial results with investors.

"Restarting them takes some time. You are starting without a power contract and without a labor force," he said. "... We are dealing with an investment of $80 million to get Ravenswood back to producing hot metal."

When Century closed its plant in Ravenswood in Jackson County on Feb. 15, 2009, it laid off 651 workers. If the company reopens the plant this year, 450 jobs would be restored almost immediately. Another 200 jobs could be added in the near future.

"We had a very busy quarter at Ravenswood. Importantly, we reached a key milestone there in reaching an agreement with post-retiree health recipients," Bless said. "We are grateful we reached this agreement ...

"There was a complex process negotiating with the retiree group. At the end of the day, like in all good negotiations, both sides didn't like it," he said. "We came to an accommodation that we thought made sense about conditions to restart the plant successfully.

"We had tremendous help from Gov. [Earl Ray] Tomblin and Sens. [Jay] Rockefeller and [Joe] Manchin who spent their own time and energy to help."

The United Steelworkers of America represented the workers at Ravenswood when the plant closed three years ago.

Bless said, "We have also begun talks with the steelworkers. That will be a key to restart the plant."

Restarting the Ravenswood plant, Bless stressed, "could be a very good investment for our shareholders.... The products this plant has produced are attractive. The physical plant is in good shape and ready for a restart."

Bless also praised the "great support in the local community [of Ravenswood] from all constituents. And there is a great work force in the local area. We have obviously lost some people who moved on and got new jobs. Many have left the region. But we believe we will still get a very talented work force."

Bless also praised a tax bill passed in the West Virginia Legislature.

On April 2, Tomblin signed that legislation to help Century reopen its Ravenswood plant as the company negotiates a long-term contract with Appalachian Electric Power.

The Legislature gave Century up to $20 million in annual tax credits for each of the next 10 years.

But the West Virginia Public Service Commission, which regulates utilities, still must approve the agreement between Century and AEP.

"We have been told to expect at least a four-month process," Bless said.

"Sometime at the end of the summer, we should get a sense of what will happen," he said. "Then we will need four months to prepare the plant" for reopening.

In a report released before Tuesday's conference call, Century officials said, "While significant work remains, we are optimistic about the prospects of restarting this plant."

Based in Monterey, Calif., Century Aluminum also operates production plants in Hawesville, Ky.; Mount Holly, S.C.; and Grundartangi, Iceland.