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:: Alcan to Build State-of-the-art Smelter in Quebec
Alcan Inc. and the government of Quebec unveiled plans for a new smelter using state-of-the-art technology that will see an initial investment in the region of $550-million (U.S.), and $1.8-billion over the next ten years.
The new smelter, to be built at the Jonquiere plant in the Saguenay region, where Alcan has extensive operations, will use so-called AP50 technology.
Alcan said the new smelter will be able to process more alumnia into aluminum at cheaper costs.
The Quebec government has agreed to provide Alcan with a $400-million interest free loan, to help fund the expansion. The provincial government has also agreed to provide the company with an extra 225 MW of power beginning in 2010.
Alcan said the project will create up to 740 jobs in the region over the next decade.
AP50 is smelting technology Alcan acquired when it bought France's Pechiney in 2004. It uses 500,000 amps of electricity, compared with current AP30 and AP35 smelters, which use 300,000 or 350,000 amps.
The stronger current allows for larger amounts of metal to be smelted in an efficient manner.
The pilot plant will represent a major victory for Quebec, which will get jobs at a time when aluminum producers are building smelters in remote locations in search of cheaper power.
At least a third of a smelter's costs come from power needed to run the plant.
Alcan recently announced plans to build a 720,000-tonne smelter in South Africa after signing a power supply agreement with state-owned power producer Eskom Holdings Ltd.
Located at Coega in Eastern Cape province, the smelter was going to use the AP50 technology, but Alcan has decided to build the plant based on the AP35 system.
A smelter using AP50 technology has never been operated on a commercial basis and the untested system may present challenges for Alcan. The more current put through a [smelting] pot, the more difficulty there is in controlling the process. It has to be stable.
Alcan eliminated more than 500 jobs in 1994 when it closed its Jonquière, Que., smelter in 2004, citing high costs at the facility.
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