No change

Fate of Alcoa's Rockdale plant still tied to economics, power

Last week some daily media outlets in the area reported something that might have been easily misinterpreted by persons outside Rockdale.

If you didn't know the background, it might have sounded like Alcoa had announced some kind of new scenario for re-opening its Rockdale Operations smelter.

Actually, Alcoa didn't say anything last week it hasn't said for the past year, ever since the company announced it was closing all six lines of the local smelter.

At that time plant officials said in order for the company to ever consider re-starting the smelter a couple of things had to happen, the price of metal had to improve substantially— essentially double from the low point of $1,300 per metric ton—and Alcoa had to iron out its power supply problems with Luminant.

There's a public information organization called the Community Advisory Panel to Alcoa's Rockdale Operations (CAPARO). It meets quarterly and sends out press releases on its previous gatherings.

Last week CAPARO's October meeting press release contained the statement "If it (the price of aluminum) reaches $2,400 to $2,500 a metric ton, restarting the smelting process may be considered."

That's correct. The price of aluminum on the London Metal exchange last week was just over $1,800 a metric ton, by the way.

Even if the aluminum price improves dramatically, something still probably has to happen on the power front in order for there to be a realistic chance of the Rockdale Operations smelter starting back up.

Alcoa listed what it called "uncertainty in the price of its power supply" as a major factor in the decision to shut down Rockdale Operations.

In fact, Alcoa has sued Luminant over power supply issues, and others. Anything can happen when attorneys, especially corporate attorneys, are involved but that litigation appears far from resolution.

There's even a legal scenario where Alcoa would ask for the Three Oaks Mine back from Luminant.

Bottom line. Nothing has changed. But look for more "Alcoa impact" news out of non-Rockdale media from time to time as they look at the map of Texas and are shocked to discover Rockdale is still on it.

But, you know what? We are.—M.B.

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2009-11-12 digital edition

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