Alcoa today announced that it has reached an agreement to sell its ownership stake in the Mt. Holly aluminum smelter in Goose Creek, South Carolina, to Century Aluminum Company for $67.5 million in cash, plus an additional potential earn-out. Mt. Holly is owned 50.3 percent by Alcoa and 49.7 percent by Century.
“While Mt. Holly is a strong facility, its cost structure doesn’t match Alcoa’s criteria for a low cost portfolio of upstream assets,” said Bob Wilt, President, Alcoa Global Primary Products. “The sale will help achieve Alcoa’s strategy to optimize its commodity portfolio, and protect the facility’s jobs and economic contribution to the local community. We would like to thank our community stakeholders and the employees of Mt. Holly for their years of support.”
The smelter has the capacity to produce 229,000 metric tons of aluminum annually and employs 500 people who will transition to Century as part of the sale. The current power contract for the site expires in December 2015. The divestiture will reduce Alcoa’s global smelting capacity to 3.5 million metric tons per year.
The sale is subject to customary regulatory approvals, and is expected to close by the end of the fourth quarter 2014. Based on current estimates, the transaction will not result in a significant gain or loss to Alcoa.
The sale is aligned with Alcoa’s strategy to create a globally competitive commodity business and lower its position on the world aluminum production cost curve to the 38 th percentile by 2016. Including this announcement, Alcoa has curtailed, closed or sold 1.3 million metric tons, or 31 percent, of its highest cost global smelting capacity since 2007.