Alcoa to further cut output at Canadian smelter amid lockout

21 December 2018 (Last Updated December 21st, 2018 12:51)

US-based aluminium major Alcoa has declared that it will further reduce production at the Aluminerie de Bécancour (ABI) smelter in Québec, Canada, due to an ongoing lockout of its unionised workers. 

Alcoa to further cut output at Canadian smelter amid lockout
36% of China’s imported bauxite comes from Australia. Credit: guillaume.

US-based aluminium major Alcoa has declared that it will further reduce production at the Aluminerie de Bécancour (ABI) smelter in Québec, Canada, due to an ongoing lockout of its unionised workers.

The company will curtail production from the remaining operating potline at the smelter by half.

The proposed reduction in output comes after the curtailment of two of the facility’s potlines in January this year following the union members’ rejection of a proposed labour agreement for hourly employees.

Alcoa stated that the additional output cut is required due to a shortage of workers triggered by recent retirements and departures.

The company added that since the lockout, its salaried employees have operated the remaining potline and performed maintenance.

In a statement, Alcoa said: “The salaried employees who remain will continue to ensure that the smelter can be ready for a potential restart.

“After extensive negotiations this year, ABI and the union have yet to reach an agreement on key terms to improve productivity and profitability.”

“After extensive negotiations this year, ABI and the union have yet to reach an agreement on key terms to improve productivity and profitability. ABI’s management remains committed to reaching a negotiated agreement.”

The Bécancour aluminium smelter has a nameplate capacity of 413,000mt per annum, across its three potlines, while the one operating line has a peak production capacity of 138,000mt a year.

Prior to the latest curtailment announcement, Bloomberg Intelligence senior analyst Andrew Cosgrove estimated that the ongoing contract dispute with the union workers at Becancour could curtail 280,000t this year from the global market.

Alcoa owns a majority stake of 74.95% in the smelter and Rio Tinto Alcan holds the other 25.05%.

Meanwhile, the United Steelworkers union, which represents the locked-out workers at the smelter, condemned the latest move by Alcoa to further curtail output, claiming it was a ‘blatant disregard for the negotiation process’, according to Bloomberg.

The company is a major producer of bauxite, alumina and aluminium products.