Alcan Inc. announced Monday its intention to modernize its Kitimat Works, B.C. primary aluminum smelter through a $1.8 billion investment. The modernization would increase Alcan’s annual global primary aluminum production by more than 4 percent and make Kitimat one of the three largest wholly-owned smelters in North America.
The modernization would increase its production by more than 60 percent, from its current 245,000 t/py to approximately 400,000 t/py. Production costs would be in the lowest part of the industry cost curve’s first quartile.
The modernized Kitimat smelter would use virtually all of Alcan’s firm power from the wholly-owned Kemano hydro-electric plant, using more electricity, more efficiently, than ever before in the smelter’s history. Alcan’s Agreement-in-Principle with BC Hydro includes a “smelter first provision,” ensuring that power deliveries to the smelter would take priority over sales to BC Hydro. Furthermore, Alcan would sell any surplus power directly to BC Hydro.
About 1,000 jobs will result from the modernization, with twice that for construction. The first of the new capacity is expected to come on-stream in 2009, with the final metal online by the end of 2011.
The implementation of the modernization project is subject to the final approval of Alcan’s Board of Directors and to certain conditions including environmental permits and the successful conclusion of agreements with BC Hydro and the CAW union.