Glencore Must Pay Damages After Alumina Dispute, Ormet Says

July 27 (Bloomberg) -- U.S. aluminum producer Ormet Corp. said Glencore International AG, the world’s biggest commodities trader, must pay damages after a dispute about raw material supplies went to arbitration. The arbitration tribunal reached a conclusion last week that Glencore must pay “specified monetary damages,” Hannibal, Ohio-based Ormet said today in a statement. Ormet claimed in April that Baar, Switzerland-based Glencore breached a contract by halting alumina deliveries from a plant in Jamaica. Glencore declared so-called force majeure, a legal clause allowing delays because of an incident outside a supplier’s control, after the refinery owner United Co. Rusal suspended operations. Alumina is refined from bauxite ore and smelted to make aluminum. Carlos Perezagua, a Glencore spokesman in Baar, declined to comment. Ormet said April 16 that should Glencore not fulfill its contract to supply alumina, Ormet would shut the Hannibal smelter in Ohio, threatening 1,000 jobs. Hannibal has an annual production capacity of 266,000 metric tons of aluminum, according to the statement. The aluminum company also said today it signed a long-term power agreement with American Electric Power-Ohio to supply Hannibal. Ormet expects further reductions in production because of lower prices and demand. “Ormet is actively exploring other measures to minimize costs and rationalize its operations,” it said. To contact the reporter on this story: Brett Foley in London at bfoley8@bloomberg.net