Century Aluminum says preliminary utility deal in place for Mt. Holly smelter

Pittsburgh — Century Aluminum has reached a preliminary agreement on the principle terms of a new, three-year power contract with the South Carolina Public Service Authority for the company's Mt. Holly aluminum smelter, it said in a statement Dec. 7.

The contract is expected to provide a minimum 290MW of electric power, allowing the smelter to increase its current production 50% by adding one-half of one potline to its current operation, resulting in total production of 75% of Mt. Holly's full capacity, Century Aluminum said.

The board of the South Carolina Public Service Authority, known as Santee Copper, voted Dec. 7 to extend Century Aluminum's current power contract for an additional three months as negotiations continue, it said in a statement.

The extension will delay the current contract's expiration from Dec. 31 to March 31, 2021.

Upon receipt of all necessary approvals, the new contract would be expected to begin on April 1, 2021 and run through December 2023, Century Aluminum said.

The aluminum producer issued a WARN notice Oct. 20 stating its intent to close operations at Mt. Holly by Dec. 31 if it is unable to secure a competitively priced power deal for the plant. The conditional WARN notices have been extended through March 31, the company said Dec. 7.

Century's notice followed an order from the state court in South Carolina stating that Santee Cooper has the exclusive right to provide electrical service to the smelter.

The ruling blocked Century from securing an alternative electricity contract with a newly-formed municipal power utility established by the nearby city of Goose Creek, South Carolina.

The potential longer-term power deal for the Mt. Holly smelter was made possible due to excess power capacity available on Santee Cooper's system through 2023, the utility provider said.

Under the potential agreement, Century would purchase all its electricity for Mt. Holly from Santee Cooper; currently the smelter gets 75% of its power off system, according to an arrangement Santee Cooper agreed to several years ago, it added.

The term of a longer agreement will be based on the timeframe when the excess capacity is available from Unit 3 at the Winyah Generating Station, requiring Century to pay incremental costs of keeping the unit online through 2023, Santee Copper said.

"We look forward to beginning the significant efforts required to rebuild the cells and otherwise prepare the plant to operate for the longer-term; this will include ultimately hiring an additional 70 people to support the incremental one-half potline," Century Aluminum CEO Michael Bless said in a statement.