Rio Tinto Alcan told 300 contractors Wednesday that it intends to spend $2.5 billion rebuilding its Kitimat aluminum smelter in a mega-project that is expected to transform the province's northwest.
The project had stalled during the 2008-09 recession but is back on track for a 2014 completion, Kitimat Modernization Project manager Michel Lamarre, told contractors who had gathered in Vancouver for a daylong session on project opportunities.
"This project is serious. We are about to start," Lamarre said in an interview after addressing the contractors.
The Rio Tinto Alcan project is the largest private sector investment in the province "in a long, long time," Jobs and Innovation Minister Pat Bell said at the opening of the contractor forum.
"This investment is significant, but it is just the spark that will light a long-term economic fuse that I think will build huge prosperity in this province," Bell said.
Rio Tinto Alcan will have spent $650 million on the project by the end of this year and already the Kitimat-Terrace corridor is feeling the benefits, Thom Meier, of the Kitimat Chamber of Chamber of Commerce, said in an interview.
"The money is flowing," Meier said.
Hotels are full, there are no houses to rent and housing prices are up, a stark contrast to one year ago, when the resource town lost a pulp mill and progress on the smelter project had slowed to the point many doubted it would proceed at all.
Now, said Meier, the mega-project has already produced spinoff benefits. Local businesses are expanding to meet growing demand.
The project still requires approval by Rio Tinto's board of directors, a final step in approvals already given. It's time for contractors to get ready to bid on the work ahead, Rio Tinto Alcan vice-president Paul Henning said in an interview. Final board approval is expected before the end of the year.
Construction is already underway on a contractor village that is expected to hold 1,500 workers needed during the construction phase. The new smelter is on a construction schedule to produce its first aluminum in 2014.
The smelter's capacity is to increase from 282,000 tonnes annually to 420,000 tonnes, yet emissions are expected to be reduced by 50 per cent.
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