The multinational Alcoa announced that it will reduce production capacity at its Lista smelter in Norway by one-third with the sole objective of greatly reducing the high energy costs for the Norwegian smelter.
Specifically, the Lista smelting plant has three growing lines with an annual nameplate capacity of 94,000 metric tons per year. The reduction of one pot line, or approximately 31,000 metric tons, will begin immediately and is expected to be completed by mid-September. Also, employees will remain to complete an orderly shutdown of a pot line and to be ready in the event of a restart.
The site is currently exposed to spot power prices, which have risen to over $600 per megawatt hour. In the fourth quarter of 2022, the site’s energy situation is expected to improve due to a favorable agreement with energy company Statkraft that will provide more predictable energy costs for the remainder of the year as well as for 2023.
Worldwide, approximately 65 percent of Alcoa’s global smelter portfolio is currently driven by long-term energy contracts linked to LME aluminum prices. In addition, approximately 30 percent has fixed or self-generated prices, and the remaining percentage is exposed to short-term markets, mainly covering Lista’s smelter consumption.
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