Alcoa in long-term power deal with Quebec
NEW YORK (Reuters) - U.S. aluminum producer Alcoa Inc said on Tuesday it reached a new energy deal with the Canadian province of Quebec to supply power for its three smelters there through the year 2040.
The contract covers the Alcoa smelters at Baie Comeau, Becancour and Deschambault, and will allow the company to invest $1.2 billion to upgrade and expand Baie Comeau's annual production by 110,000 metric tons of aluminum to 548,000 metric tons.
Prior to the agreement, Alcoa's three smelters in Quebec produced more than 1.1 million metric tons of aluminum per year, employing more than 3,600 people directly, the company said.
Quebec, which has major hydro-power operations, produces huge quantities of electricity, which is essential for aluminum smelting.
Alcoa said the three Quebec smelters will generate more than $1.8 billion in economic spin-offs annually in the province as a result of this agreement.
During the upgrade and expansion phase of the project, an estimated $540 million of added economic value will be created in Quebec over four years, Alcoa said.
Following construction, the operations will then generate -- onsite as well as for suppliers and subcontractors -- an added economic value of $470 million per year, supporting 3,900 jobs.
Initial engineering studies for the upgrade and expansion at Baie Comeau will begin this year, with the majority of the investment planned for the final stages of the project.
Alcoa expects the conversion and upgrading of smelting technologies at Baie Comeau as well as expansion of output to be completed by 2015. Continued...