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Rio Tinto Alcan faces $100-million hit

Thursday, Jul 15, 2010
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Rio Tinto Alcan is expected to take a $100-million (U.S.) hit to its operating income in the second half of 2010 because of low snow and rain levels in Quebec.


Low water levels and other factors have constrained Rio Tinto's ability to produce power, forcing it to buy more electricity than normal or curtail output.


The aluminum division of the London-based mining giant will need to buy more electricity from the provincial utility.


Information released by the company doesn't break out exactly how much it will pay for higher energy purchases from Hydro-Québec.


Rio's aluminum smelters are located mainly in the Saguenay region of northeastern Quebec.


The area has been able to attract producers because of the abundance of low-cost hydroelectric power, which is essential for producing aluminum.

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