Kaiser Curtails Production at Tacoma Smelter

“Kaiser Aluminum has begun what the company calls a temporary curtailment of approximately 128,000 metric tonnes of primary aluminum production at its Tacoma and Mead smelters.The reduction in capacity is said to be due to unprecedented high market prices for electricity in the Pacific Northwest, according to Kaiser officials.The curtailment is to result in the layoff of approximately 400 temporary workers, or scabs, at the two plants that were replacing locked out United Steelworkers of America union workers. The USWA workers at Kaiser went on strike at the end of September 1998, and were locked out by the company in January of 1999.Kaiser noted as a result of the curtailment, the company avoids the current high cost of purchasing market power and has sold back to the market 100 megawatts of non-federal power it has under contract through June 20, 2001. The company is hoping the sale of the power is expected to mitigate higher energy prices and lost profits due to the curtailment.Market prices for power are at levels never before experienced in this region, said Kaiser president and CEO Raymond J. Milchovich. Milchovich said long-term regional energy supply is a key issue for the company.To implement the curtailment, the company said it is shutting down all three potlines at the 73,000-tonne Tacoma smelter, which had previously been operating at an annual rate of about 65,000 tonnes, and two and one-half potlines at the larger 200,000-tonne Mead smelter.With the curtailment, the company’s primary aluminum operating rate would be approximately 67 percent, as compared to an average estimate of 82 percent in 1999, the company said.Recently, the company has had difficulty in offloading a ship carrying alumina ore at the Port of Tacoma, and ongoing picketing by union members.Kaiser was also recently assessed fines totaling over $500,000 by the federal government for safety and operational violations regarding an explosion at its Gramercy, Louisiana plant.Negotiations between the company and union have been scheduled to resume on June 28 at a site yet to be determined.”