DJ Ormet: Tribunal Rules Glencore To Pay Alumina Dispute Damages

LONDON, Jul 30, 2009 (Dow Jones Commodities News Select via Comtex) -- ORMT | Quote | Chart | News | PowerRating -- A tribunal has ruled that Switzerland's Glencore Ltd. must pay damages to U.S. aluminum producer Ormet Corp. (ORMT) following a dispute over raw materials, Ormet said in a recent statement. The company didn't specify the level of the damages it will receive. The dispute arose when supplies of alumina to Ormet's smelter were disrupted due to the temporary shutdown of alumina refining facilities that supply Glencore. Ormet's smelter produces aluminum sow from Glencore-supplied alumina, and the Swiss firm gets tolling fees. The tolling agreement will now end once all of the alumina received from Glencore has been processed and paid for at the 2009 rate. Glencore had declared force majeure on alumina supplies to Ormet, but the U.S. firm had argued it is contractually obliged to find other means to supply its raw materials. Ormet's 266,000 tons-a-year smelter, located in Hannibal, Ohio, has already cut annual output by some 44,000 tons, or around one potline out of a total of six, and said more cuts may follow. Wednesday it said it had issued a notice indicating it could eliminate up to 982 jobs, although no final decision has been made. It also operates the 540,000 tons-a-year Burnside alumina refinery in Louisiana, which is currently idled.