Pittsburgh aluminium pioneer Alcoa Corporation announced plans on Monday to permanently close its alumina refinery at Port Comfort, Texas.
Alcoa says the decision comes as the result of a company-wide review of about a quarter of its production capacity with an eye toward improving costs and sustainable profitability. The 2.3 million metric tons per annum of refining capacity has been curtailed since the summer of 2016.
“We operate one of the world’s largest alumina refining systems, and we are committed to maintaining our strong, first-quartile position,” noted Roy Harvey, Alcoa’s President and Chief Executive Officer. “While this decision is difficult because of the long history of operations in Point Comfort, we must eliminate unprofitable capacity and continue to improve our Company for the long term.”
Currently the site has a maintenance staff of 45 individuals, which Alcoa indicates will be laid off as a result of the decision, save for those necessary in carrying out decommissioning, demolition, and site remediation.
The Point Comfort alumina refinery is an asset of Alcoa World Alumina and Chemicals (AWAC), which is a joint venture between Alcoa Corporation and Alumina Limited, of which Alcoa owns 60 percent. The joint venture agreement allows the companies to allocate liabilities between themselves, which Alcoa says is being done at the present time.
Alcoa expects to reap an annual net income boost of US$15 million and cash savings of about US$10 million from closing the plant once demolition and remediation is complete. The firm will record restructuring charges of US$175 million in the current quarter. Alcoa will also receive about US$115 million in cash outlays, which it says will be spent over the next five years, US$25 million of it in 2020.