Alcoa is to temporarily idle production at its two aluminium smelters in Fusina and Portovesme, Italy.

It is idling the smelters while it appeals against an EC ruling on energy tariffs.

The EC say that Italy’s extension of an existing electricity tariff after 2005 does not comply with EU state aid rules and that a portion of the benefit received by Alcoa should be refunded. Alcoa disagrees with the decision and is appealing.

The tariff was in place for more than 10 years in Italy and approved by the EC in 1995, the year that Alcoa bought the sites. It was designed to provide competitive power to energy-intensive industries in Italy, in line with similar energy costs in other EU countries.

Alcoa said without the tariff, the two smelters, which have a combined employment of approximately 1000 and an additional 1000 indirect jobs and a combined capacity of 194Mt/y of aluminum, are not viable at current Italian power rates.

The process to curtail the smelters will begin immediately, with completion expected in the second half of December. The company will work with appropriate works councils and employees at the smelters to gradually wind down production. Alcoa’s rolling mill in Fusina, which is adjacent to the smelter, is not directly impacted by the action.


AIT November 2009