Rio Tinto Alcan has signed its long-term power contract for the Sebree aluminium smelter in Kentucky following an agreement on the terms and conditions of the Big Rivers "unwind" transaction. The new contract will secure power for Sebree's smelting operations through 2023.
"This is good news for our employees and the local community in Sebree, especially given that the smelter's current power contract would have expired at the end of 2011," said Jacynthe Côté, chief executive, Rio Tinto Alcan. "This contract is a key component in the sustainability of our smelting operations in Kentucky."
Together with Century Aluminum's Hawesville smelter, which is also included in the extended power contract, the new agreement will help employ approximately 1,200 people in western Kentucky. These two smelters also create an estimated 3,500 indirect jobs in the region, equating to approximately $193 million in annual wages and salaries. Furthermore, Rio Tinto Alcan's Sebree smelter spends $44 million annually on goods and services from regional vendors.
"We're very happy with the outcome," said Stephane Leblanc, Sebree's plant manager. "There have been many people involved in getting this deal signed and we thank our employees and local union leaders for their support. It was a long and often bumpy road over the past four years. Power is a vital part of our operations and the unwind had to be approved before we could reach a new long-term contract."
In December 2005, Big Rivers Electric Corporation and E.ON U.S. announced their intention to return both operational control of Big Rivers' power plants and ownership of the resulting electricity back to Big Rivers in what was commonly known as the "unwind" agreement. E.ON U.S. subsidiaries had been operating the plants since 1998 as part of a lease agreement to assist Big Rivers during a period of financial difficulty.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the United Kingdom, combining Rio Tinto plc and Rio Tinto Limited. Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminum, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.