Ravenswood idle, Century buying Ky. smelter
CHARLESTON, W.Va. -- Century Aluminum, which has said for many months that it wants to reopen its Jackson County plant, is making moves -- but not in West Virginia.
On Monday, Century announced it was acquiring the Sebree aluminum smelter in Henderson County, Ky., for $61 million. Rio Tinto Alcan, the previous owner, employed more than 500 people there to produce 205,000 metric tons of aluminum a year.
"As part of the transaction, RTA will retain all historical environmental liabilities of the Sebree smelter and has agreed to fully fund the pension plan being assumed by Century's subsidiary at closing," the company announcement added.
Century also operates an aluminum smelter at nearby Hawesville, in Hancock County, Ky., which employs 650 people.
Meanwhile, Century Aluminum Co.'s smelting plant in Ravenswood remains shuttered. Century closed the plant, which originally opened in 1957, in February 2009, laying off 651 employees.
Michael Bless, president and CEO of Monterey, Calif.-based Century Aluminum, recently said it is a "priority" for the company to reopen its Ravenswood facility.
In October, as part of an incentive package to get Century to reopen its Ravenswood plant, West Virginia lawmakers and the state Public Service Commission agreed to let Century pay a lower rate for its electricity than other power customers.
Century officials rejected that deal, saying it wasn't beneficial enough, but said they still wanted to work out a deal suitable for everyone.
Jeri Matheney, communications director for Appalachian Power, said on Monday, "The ball is in their court. We have met with them and tossed around ideas and different solutions.
"It is definitely very exploratory, and right now, it is in their hands to determine what the next step is they want to take."
Matheney said Appalachian Power already has a "special contract" with Century.
"We negotiate with them on a specific contract. They don't pay the 9.7 cents per kilowatt-hour that a residential customer would pay," she said. "We are ready and willing to work with them. We want them back as a customer."
Matheney also said, "Kentucky is a state with competitive electricity, which West Virginia is not. They are making a special arrangement in Kentucky, where [electricity costs] can go up and down with the market price."
In recent filings with the federal Securities and Exchange Commission, Century Aluminum reported improved economic conditions. During the first quarter of 2013, Century reported making a profit of $8.3 million, compared to a $4.4 million loss suffered during the first quarter of 2012.
On Monday, Century Aluminum of Kentucky, a Century Aluminum subsidiary, also announced they reached a tentative agreement with Kenergy Corp. and Big Rivers Electric Corp., two electric power companies, to provide "market-priced power to the Hawesville smelter."
"Under the arrangement, the electric cooperatives would purchase power on the open market and pass it through to Century at the market price plus additional costs incurred by them," Century stated in its news release.
That release also quoted Bless as saying, "Gaining access to competitive energy is crucial for the continued viability of these plants, and we hope that the tentative agreement we have reached for Hawesville will be the first step towards obtaining market priced power."
Karen Gorrell, whose husband worked at Century's Ravenswood plant for 33 years, has been leading the retirees' movement to win back pension benefits taken away after the company shut the plant down in 2009.
"I knew they were seriously looking at the Sebree plant," Gorrell said on Monday. "I am not shocked they bought it. They were trying to get the same power arrangement in Kentucky that they want in West Virginia. I don't know what that means.
"Century says they are still committed to keep the plant here and are negotiating a deal with APCO. I hope they are serious about restarting the plant here in Ravenswood.
"The agreement they got in October gives them $40 million a year in tax credits," Gorell said. "But my understanding is that Century wants to buy power on the open market, where it can be much cheaper. They are negotiating with APCO right now."
Mike Dildine, Century's media spokesman in the company's main offices in Monterey, did not return a telephone call on Monday.
Century also operates aluminum smelting plants in Mount Holly, S.C., as well as in Grundartangi and Helguvik in Iceland.
More information is available on Century's website at www.centuryaluminum.com.
Reach Paul J. Nyden at email@example.com or 304-348-5614.