Alcoa Cuts One-Third Of Aluminium Production At Lista Smelter Due To Power Costs

Alcoa Cuts One-Third Of Aluminium Production At Lista Smelter Due To Power Costs
Source: Alcoa

Pittsburgh aluminium pioneer Alcoa Corporation announced the curtailment of a third of aluminium production at its Lista smelter in Norway due to ongoing high power costs on Tuesday.

According to the firm, one of the three potlines will begin shutdown immediately, with the process to be completed within the next two calendar weeks. Employees at the plant will remain on to shut down the 31 thousand metric tons per annum potline and will remain in readiness in the event that the line is restarted in the near future.

Alcoa says the site is subject to spot energy pricing, meaning the plant has had to endure an increase in power prices of over US$600 per megawatt hour. Although prices are currently high, the firm expects relief later this year thanks to a new agreement with utility provider Statkraft that Alcoa says will give it more predictability with power pricing through the end of next year.

Currently almost two thirds of Alcoa’s aluminium smelting portfolio is tied to long-term energy agreements whose prices are tied to the price of aluminium at the London Metal Exchange (LME). Another 30 percent is subject to either fixed pricing or self-generated pricing, with the remainder consisting of mostly Lista’s power consumption, which is tied to the variable short-term power market.

Alcoa’s smelters have had an eventful month of August. Its Mosjøen aluminium plant suffered a brief strike from the plant’s labor force, and the firm curtailed all production at its Slovalco aluminium smelter in Slovakia due to consistent high energy prices.

Alcoa’s Lista aluminium smelter boasts a nameplate production capacity of 94 thousand metric tons per annum across its three potlines. The plant was commissioned in 1962 and produces extrusion billet and foundry alloys.