[Update includes additional background and context]
Chicago 07/01/2016 - Alcoa announced on Thursday that it will permanently close its Warrick Operations primary aluminium smelter in Evansville, Indiana, by the end of the first quarter.
The smelter has a capacity of 269,000 tonnes and is closing due to low aluminium prices. Three-month aluminium on the London Metal Exchange last traded at $1,470 per tonne, which is near a six year low.
The rolling mill and power plant in Warrick will remain online, Alcoa added.
Additionally, the company will reduce alumina production by one million tonnes, which includes curtailing the remaining 810,000 tonnes of refining capacity at its Point Comfort operations in Texas.
Pt. Comfort is part of the Alcoa World Alumina and Chemicals group of companies owned 60 percent by Alcoa Inc., and 40 percent by Alumina Limited.
"Despite the hard work of employees, these assets are not competitive. We’re confident that these actions are the right ones in face of these challenging market conditions," Roy Harvey, President of Alcoa’s Global Primary Products, said.
As of result of today’s announcement, Alcoa will record an associated charge in the fourth quarter of approximately $120 million after-tax, or 9 cents per share, of which approximately 45 percent will be non-cash.
Once the actions announced today and in the fourth quarter are implemented, Alcoa will have curtailed or closed 812,000 tonnes smelting capacity and 3.3 million tonnes of refining capacity since March 2015.
In November, Alcoa said that it will keep its Massena West primary aluminium smelter in New York open after receiving $38 million in incentives from the state. The company has planned on idling the 130,000-tonne-per-year smelter in the first quarter of this but that was met with serious resistance from New York governor Andrew Cuomo and US senator Chuck Schumer.
Alcoa will however continue with its other previously announced curtailments at the Intalco and Wenatchee primary aluminium smelters in Washington, which have combined capacity of 370,000 tonnes per year.
Alcoa share prices were last down 34 cents or 3.8 percent to $8.27 on the New York Stock Exchange.
(Editing by Tom Jennemann)