Alcoa agrees to postpone closing Italy smelter

 

 

Alcoa had planned to close its Portovesme smelter on the island of Sardinia by mid-year as part of efforts to cut global output and costs. The plan has run into fierce opposition from Italy's government, Sardinia's authorities and unions.

 

 

Under the deal, Alcoa will start the process to shut the smelter on Sept. 1 if there was no letter of intent agreed between Alcoa and an interested party before Aug. 31.

 

 

If the letter of intent arrives but the sale is not closed by Oct. 31, Alcoa will start shutting the plant from Nov. 1, it said. Shutting the smelter would take a few days.

 

 

Alcoa said it would continue to pay the employees for the month of curtailment and the following month.

 

 

Alcoa said in a statement the parties have reached a framework agreement "that provides responsible and appropriate solutions for our employees and the community, including switching from mobilità to CIGS (two layoff schemes under Italian law), and facilitates an orderly curtailment of the smelter."

 

 

"The agreement as well provides the process to sell the Portovesme plant to another party, an opportunity to succeed if the essential conditions to operate the smelter will be addressed in the coming months," it said in a comment to Reuters.

 

 

Italy's FIM-CISL metal workers' union said in a separate statement earlier on Tuesday the temporary layoff procedure - a widely used Italian scheme to keep workers on company payrolls even though they are sent home on reduced pay - would last for one year and could be extended for another year.

 

 

"The FIM-CISL expresses its great satisfaction with reaching an agreement which has been unthinkable even a few hours ago," the union said after the talks in Rome which lasted well into the night while Portovesme workers protested in front of the ministry headquarters.

 

 

"The agreement ensures industrial continuity and saves jobs in a particularly critical area of Sardinia," the union said.

 

 

The Ministry said in a separate statement the deal would allow the smelter to keep running until the end of 2012.

 

 

Unions and Sardinian authorities say a shutdown of the plant, a major employer on the island, would cost about 500 jobs at Alcoa and about 1,000 held by people linked to the smelter.

 

 

The Italian government and unions wanted to win time to find new investors for the smelter and keep jobs.

 

 

Alcoa has granted access to information about the plant to three potential investors - commodities group Glencore, investment company Klesch and Austria's Hammerer Aluminium Industries.