Power Outage Idles Two of Noranda’s Three Smelters

Power Outage Idles Two of Noranda’s Three Smelters

An electrical outage has led to the idling of two of Noranda Aluminum’s three smelters. Noranda announced the outages yesterday at the New Madrid, Missouri facility, blaming an electrical supply circuit failure.

The press release issued by Noranda went on to describe the incident thusly:

The electrical supply circuit failure occurred shortly before 1:00 p.m. Central Time on January 7, 2016 and no serious injuries were reported. Noranda is assessing the incident to determine its root cause. The third pot line was not directly affected and production in that line has continued.

No timetable for resumption of production has been determined, as the investigation into the incident is ongoing. In the interim, the facility is adjusting workflow and staffing to be compatible with a one-pot-line operation. Noranda employs about 850 at its smelter, and it is required to keep that level of employment to continue to receive discounted energy rates from the state.

Noranda is simultaneously assessing what impact, if any, this outage will have on alumina production at its refinery in Gramercy, Louisiana and its bauxite mining operation in St. Ann, Jamaica. The firm acquires primary aluminium from third parties, so it does not anticipate an interruption in the supply of raw aluminium.

Noranda has no estimates on damages, but anticipates that the losses will be covered by business interruption and property insurance.

Noranda Aluminum is the biggest single buyer of electricity from Ameren Missouri, accounting for about ten percent per annum of Ameren Missouri’s output. Noranda Aluminum Holding Corporation (“Noranda HoldCo”) was formed in 2007 by Apollo Management, L.P., in order to acquire a portion of the aluminum business of Xstrata (Schweiz) AG. Before being acquired by Apollo Acquisition, Noranda existed as a subsidiary of Xstrata. Prior to Xstrata, Noranda was a subsidiary of Falconbridge Limited in Toronto, Ontario, Canada.