Alcoa selling Tapoco Hydroelectric plant for $600M
Pittsburgh Business Times
Friday, June 29, 2012
Malia Spencer
Aluminum maker Alcoa Inc. (NYSE: AA) expects to receive roughly $600 million after selling one of its hydroelectric facilities to Brookfield Renewable Energy Partners, the company said in a statement.
Brookfield is buying the 351-megawatt Tapoco Hydroelectric Project located in eastern Tennessee and western North Carolina that is operated by the Alcoa subsidiary Alcoa Power Generating Inc. The deal includes four generating stations and dams along the Little Tennessee and Cheoah rivers, 86 miles of transmission line and 14,500 acres of land.
The deal is expected to close by year-end.
Tapoco was originally built to power aluminum smelting and rolling mills in Alcoa, Tenn. Earlier this year it was announced that the smelter at this site, which had been curtailed since 2009, would be permanently shut down.
The company has been reducing costs of production including taking down high-cost facilities.
Also this week, Alcoa said it expects to operate its Point Henry aluminum smelting facility in Australia until at least mid-2014. In February the company said it was reviewing the viability of the operation that was facing “substantial losses” in light of global economic conditions.
“Since then global market conditions, such as exchange rates and the aluminum price, have made the situation worse,” said Alcoa of Australia Managing Director Alan Cransberg in a written statement. “However thanks to the efforts of our workforce, and the support we have received from both the Australian and Victorian governments, unions, contractors and suppliers, we believe we can minimize those losses.”
Part of this means reducing the site’s workforce by 10 percent. Where possible that will be done voluntarily, the company said.
“The way things are right now, two year is a long time in our industry,” Cransberg said. “No one can predict exactly what’s going to happen with the global economy or where exchange rates and the price of aluminum will move.”