Hi, everyone
I think you'll agree that this is exactly the kind of industry, and the kind of
good corporate citizenship and concern for employees, that you need in Port
Alberni. Well, maybe not.
But depend on it - if the economics of aluminum production ever do soak up the
enormous surplus smelting capacity around the globe, and some investors actually
do show up with money in hand to build a smelter in town - this will be the
standard you can expect from the scoundrels.
I don't have an email address for Graham Andrews, but I thought he might be
interested in this article.
Arthur Caldicott
Cobble Hill
arthur.caldicott@home.com
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2 LOSING PROPOSITIONS CATCH KAISER IN A TOUGH SPOT
The Associated Press
SPOKANE -- Kaiser Aluminum Corp. has a problem.
It can resume making metal at its idled Mead smelter and lose money, or it can
keep the smelter closed and lose money.
"It's not about making money. It's about losing the least amount," company Vice
President Pete Forsyth said this week.
Kaiser officials have said they will decide soon whether to restart the smelter,
shuttered last year when it became much more profitable to sell its allotment of
federal power than to make aluminum.
Kaiser wants the federal Bonneville Power Administration to pay it to remain
shut down. In return, Kaiser would give its load of 251 megawatts -- enough to
serve more than 150,000 homes -- to BPA.
But BPA -- which criticized Kaiser's decision to keep the $468 million it made
from resale of federal power at the height of the energy crunch -- doesn't need
Kaiser's electricity and has told the company so.
Now that power prices have dropped, river levels have stabilized and the tight
electricity supplies have relaxed, BPA isn't in a hurry to pay Kaiser a premium.
Last week, the company called several dozen workers back to prepare the plant
for possible restart.
"This is simply Boy Scout activity, being prepared," Forsyth said. "We haven't
made a decision, but to be ready, there's some work to do."
Prices still high
Beginning Oct. 1, BPA has contracted to deliver 251 megawatts to Kaiser.
Each megawatt would cost the company about $37 an hour.
That may be too high for profitable aluminum smelting, especially because prices
for the metal have fallen below 65 cents a pound, Forsyth said. Last year prices
were near 73 cents.
Power prices have dipped from about $200 a megawatt early this summer to about
$67 Thursday.
If Kaiser keeps the plant closed and declines the power, BPA could sell it into
the market, spokesman Ed Mosey said.
The new contracts no longer contain provisions that allowed aluminum companies
to resell federally produced power into the soaring electricity markets for
spectacular profits.
Mosey said the two sides were negotiating a BPA buyback for Kaiser's allotted
megawatts, but the gap is wide in what Kaiser wants and what BPA is offering.
"They were asking for what we paid the other aluminum companies," Mosey said.
"That's out of the question."
Kaiser first wanted about $27.40 for each megawatt-hour, Forsyth said. Other
aluminum companies received $18 to $20.
He said Kaiser's initial offer included spending money to help its suppliers
offset losses caused by more months of smelter shutdowns.
The company is now seeking about $17, a price Forsyth said reflects changing
market conditions.
Forsyth said BPA's standing offer to pay $4 a megawatt-hour to stay shut down
for two years is too low.
BPA isn't interested in offering Kaiser the same sort of deal extended to other
aluminum companies, Mosey said. The times have changed and now favor the federal
agency, he said.
"What they're asking for doesn't make economic sense for our other customers and
ratepayers," Mosey said. "The market has not turned in their favor."
http://news.bellinghamherald.com/stories/20010811/Business/63488.shtml
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