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Alcoa to permanently close Rockdale ops, divest Italian smelter

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Alcoa to permanently close Rockdale ops, divest Italian smelter

Alcoa Corp. intends to permanently close its Rockdale aluminum operations site in Texas, it said Dec. 21.

The site, which has been fully curtailed since 2008, includes a primary aluminum smelter, an aluminum powder plant, and associated buildings and equipment.

A strategic review of these assets determined that these operations have limited economic prospects. The company continues to market for sale over 30,000 acres of land at the Rockdale site.

The company also agreed to divest its Portovesme primary aluminum smelter, fully curtailed since 2012 and shuttered since 2014, to Invitalia, an Italian government agency that manages economic development.

The Italian government and Alcoa have settled matters related to past energy tariffs and a groundwater remediation project.

The company expects to record an estimated charge of US$55 million in connection with the closure of Rockdale, and an estimated US$22 million reserve reduction in connection with the sale of the Italian smelter in the fourth quarter.

The net earnings impact of the two actions is estimated to be negative 18 cents per share.

Alcoa anticipates annual adjusted EBITDA benefits of about US$3 million upon completion of the Rockdale decommissioning in 2022, and of about US$4 million upon completion of the Portovesme divestiture in 2018.

Cash outlays for the Rockdale closure are expected to be about US$53 million over the next five years, including holding and demolition costs, with approximately US$16 million in 2018.

Meanwhile, cash outlays for the Italy settlement are expected to be between US$40 million and US$50 million over the next five years, with about US$10 million in 2018.