Rio Tinto Alcan closing Shawinigan smelter a year early

Closure will affect most of the smelter's 425 workers.

MONTREAL – Rio Tinto Alcan says weak metal prices has forced the aluminum producer to close its 72-year-old smelter in Shawinigan, Que., about a year ahead of schedule in November, affecting most of its 425 workers.

The company will immediately curtail 50,000 tonnes of production at its Shawinigan smelter in Quebec and will progressively curtail the remaining 50,000 tonnes of capacity by the end of November.

“This decision follows a strategic review that explored every option for continuing smelting operations; due to dated technology and continued weakness in aluminium prices, Shawinigan’s primary aluminium capacity is not currently sustainable,” said Arnaud Soirat, CEO of Rio Tinto Alcan Primary Metal. “We will work closely with our valued customers to limit the impact of this decision.”

The announcement was made Wednesday, ahead of environmental regulations that would have forced the facility to close at the end of next year.

About 26,000 tonnes of production will be reduced this year, with the full effect hitting next year.

About 60 workers will remain at the casting house until the facility closes at the end of December 2014. But all employees will continue to receive a full salary for a year, as outlined in the union collective agreement, said Jacques. Rio Tinto Alcan has about 5,000 workers in Quebec.

The company’s Shawinigan smelter was commissioned in 1942 and employs 425 people.

Soirat said the company will meet with union representatives to evaluate solutions such as retirements to minimize the impact and will provide impacted employees with re-training and job-search assistance.

The president of the local union said the announcement is a tough blow for workers and a community that has seen several manufacturers close in recent years, shedding hundreds of well-paying jobs. But Louis-Gerard Dallaire said clauses negotiated in collective agreements anticipating an eventual closure will cushion the blow.

“Yes the news is difficult but there were measures put in put in place for workers to take their time and not feel rushed, that’s kind of novel,” he said.

About 276,000 tonnes of aluminum capacity had been scheduled to be removed when the metal giant’s division was slated to close facilities in Shawinigan and Arvida, Que., by the end of 2014. That will be offset by the addition of 60,000 tonnes with the impending opening of a facility using AP60 technology.

An expansion in Kitimat, BC will increase production to 420,000 tonnes from the current 187,000-tonne output.

Commissioned in 1941, the Shawinigan smelter uses Soderberg technology, which is to be phased out of all Quebec primary aluminium smelters by Dec. 31, 2014 in compliance with Quebec environmental regulations.

London-based Rio Tinto is also looking to sell its Pacific smelters which have 1.6 million tonnes of capacity.

In May, the Quebec government announced that it had given both Alcoa and Rio Tinto Alcan more time to honour their investment commitments in the province because of the weak aluminum market.

Rio Tinto is an international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Ltd., which is listed on the Australian Securities Exchange. Its major products include aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt) and iron ore.