Rome — Switzerland's Sider Alloys will in 2020 restart the former Alcoa Italian Portovesme aluminum smelter that it purchased in February last year, with its cells scheduled to be operational by January 2021, a source close to the matter said.
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Sider Alloys unveiled its business plan for Italy's sole aluminum production plant, located in the southwest of Sardinia, at a Thursday meeting at the Italian industry ministry, at which trade union and government representatives were present, the source added.
The company could not be immediately reached for comment Friday.
The restart of the smelter is still contingent on an agreement on electricity costs, which dampened interest from other buyers in past years prior to the smelter's purchase by Sider Alloys. The ministry has called another meeting next month in an attempt to reach an accord, to which Italian electricity company Enel had been invited, the source said.
The Swiss company is also waiting to start vamping operations at the smelter, as it gears up to restart the aluminum plant. Chinese revamp specialist Chinalco has been selected to carry out these works, according to reports in the Italian media, including leading financial newspaper Il Sole 24 Ore.
"The signing of the contract with the Chinese company that is due to carry out the revamping is subject to a solution being found in terms of electricity costs, as these go hand in hand," the source said, adding that the 328 cells should be operational at the plant in January 2019 if all goes according to plan.
An aluminum smelter consists of a large number of steel cells in which aluminum is extracted from its oxide, alumina, through electrolysis.
Alcoa had been seeking a buyer for the smelter since 2011, when it said it would sell or mothball the facility as part of a wider cost-cutting plan. The business had been folded into Italian state-owned investment vehicle Invitalia at Alcoa's request because it did not want to be held responsible if the new investor failed in its attempt to relaunch the smelter. Sider Alloys purchased the plant from Invitalia.
Commodities groups Glencore and Klesch, both Swiss-based, had previously expressed interest in buying the smelter before pulling out due to a series of issues including high energy costs. Glencore was widely reported to have withdrawn due to the government's failure to guarantee electricity tariffs for the next decade of under Eur25/MWh. The government at the time said the condition breached EU rules.
When Sider Alloys acquired the smelter last year, it agreed to invest Eur135 million ($153.7 million) to launch and improving technology at the unit, which has been fully closed for six years. Once fully operational, the plant was forecast to produce 147,000 mt/year of primary aluminum, according to company estimates.
The business has been renamed Sider Alloys Italia as part of the acquisition.
The Italian government was involved in helping find a buyer for the Alcoa Portovesme smelter, which it considers to be of primary strategic importance to the nation as it is Italy's sole aluminum production plant, meeting some 80% of total domestic demand for the automotive, aerospace, construction and packaging sectors.
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