Alcan, Kitimat agree to break deadlock in talks on $1.8b B.C. smelter upgrade

Aluminium producer Alcan Inc. says it is sitting down with the District of Kitimat to produce a "positive environment" for the planned $1.8-billion upgrade to its smelter in northern British Columbia. The Montreal-based company and the district government have been at odds over Alcan's plans to sell surplus electricity from its Kemano power station while reducing the workforce at its Kitimat operation. Alcan says in a news release that to facilitate discussions it has agreed to a request by the district for a 30-day extension of the deadline to file its appeal arguments after losing a B.C. Supreme Court decision on the power sales. The move follows negotiation of a new five-year contract with its 1,300 Kitimat employees, represented by the Canadian Auto Workers, which Alcan said was a precondition of the upgrade proceeding. The project, announced last August, also needs environmental approvals. Alcan said in a news release Thursday the modernization of its Kitimat smelter would increase Alcan's annual global primary aluminium production by more than four per cent and make Kitimat not only one of Alcan's largest wholly-owned smelters, but also one of the three largest in North America. Continue Article Kitimat's aluminium production capacity would increase by 40 per cent and greenhouse-gas emissions would drop by half a million tonnes per year. However the plan calls for a 500-job reduction in the workforce. Earlier this year Alcan signed contract with project management firm Bechtel to produce a detailed feasibility study and preliminary engineering outline design for the expansion. The project has had a bumpy rid, including a decision by last year by the B.C. Utilities Commission to quash B.C. Hydro's long-term power purchase agreement with Alcan because the utility made a miscalculation and failed to prove the benefits would offset the costs. The District of Kitimat went to court to challenge Alcan's power sales. It argued that a 1950 agreement between Alcan and the B.C. government allowed the company to use its power only to run the smelter or create jobs in the area. But the B.C. Supreme Court ruled Alcan faces no restrictions on what it does with the power it generates.