Alcoa (NYSE: AA) plans to close 12% of its global aluminium smelting capacity to improve the company’s cost position and competitiveness, with low aluminium prices to blame.
Aluminum prices have fallen more than 27% from their peak in 2011.
The company will close or “curtail” about 531,000 tonnes of annual capacity by permanently closing its smelter in Alcoa, Tennessee, which was curtailed in 2009, along with two of the six idled potlines at its Rockdale, Texas smelter.
Together, these closures will reduce Alcoa’s global smelting capacity of 4.5 million tonnes per year by 291,000 tonnes, or about 7%.
The curtailments at other smelters will be announced in the near future and will reduce Alcoa’s global smelting capacity by an additional 240,000 tonnes, or about 5%. The curtailments are expected to be complete by the first half of 2012.
Alcoa said it would report restructuring charges for the fourth quarter of between $US155 million (A$151 million) and $US165 million (A$160.8 million) after tax as a result of the changes, of which about 60% is non-cash.