Alcoa to close Suralco plant
Alcoa is ramping down production at its refinery in Suriname, citing evaporating bauxite reserves and energy costs.
The closure of the plant, which will curtail annual capacity of 887,000 tonnes of alumina, is expected to cost the company US$65 million to US$75 million in restructuring charges, after taxes.
Alcoa said the closure will be finalised November 30, and that discussions are ongoing with the government of Suriname and others on how the process is managed.
Talks between the metals company and the Suriname government in October 2014 - the same month it announced the sale of its Jamaican asset, Jamalco - on a long-term solution for Suralco's energy needs and raw materials, but a year later the parties apparently found no magic bullet.
"Suralco's ongoing energy challenges and limited bauxite supply, combined with unfavourable market conditions, mean it is no longer possible to continue operations," said Bob Wilt, president of Alcoa Global Primary Products, in a company statement.
"Our immediate attention now turns to the employees of Suralco who have worked hard during these challenging times. We understand how difficult this decision is for employees and we will work closely with them and our unions, government and community stakeholders during the transition," he said.
Suralco's closure aligns with the company's new strategy to shed its mining persona and refocus as a global commodities business. Last year, for example, it sold its controlling stake in the Jamalco alumina refinery in Jamaica to Hong Kong-based Noble Group for US$140 million.
Since March of this year, the 125-year-old Alcoa has been evaluating its 2.8 million tonnes of refining capacity to determine which plants to sell and which would be mothballed, saying the review was "consistent with the company's 2016 goal of lowering its position on the world alumina cost curve to the 21st percentile".
Previously, Alcoa described itself as a leading producer of primary and fabricated aluminium, as well as the world's largest miner of bauxite and refiner of alumina. Today, it introduces itself as a global leader in lightweight metals technology, engineering and manufacturing.