Alcoa, a global leader in lightweight metals technology, engineering and manufacturing, has announced that it will sell its ownership stake in the Mt. Holly aluminium smelter in Goose Creek, South Carolina, to Century Aluminium Company for $67.5 million plus an additional potential earn-out.
The smelter, which is owned 50.3% by Alcoa and 49.7% by Century, has the capacity to produce 229,000 metric tonnes of aluminium annually and employs 500 people who will transition to Century as part of the deal.
Alcoa said the sale was in line with its strategy to create a globally competitive business and to lower its highest cost global smelting capacity.
“While Mt. Holly is a strong facility, its cost structure doesn’t match Alcoa’s criteria for a low cost portfolio of upstream assets. The sale will help achieve Alcoa’s strategy to optimise its commodity portfolio, and protect the facility’s jobs and economic contribution to the local community. We would like to thank our community stakeholders and the employees of Mt. Holly for their years of support,” said Bob Wilt, President, Alcoa Global Primary Products.
Michael Bless, President and CEO of Century Aluminium Company, said the purchase of Alcoa’s ownership stake in the Mt. Holly aluminium smelter underlined the company’s intention to expand the company’s hot metal capacity in the US.
“We are pleased to welcome the Mt. Holly team to the Century family. We are obviously familiar with this excellent plant due to our long affiliation, and are excited about the opportunity to assume full ownership. We know that Mt. Holly’s employees share our core values of safety, product quality and customer service. This transaction furthers our intent to increase our North American hot metal capacity and improve the value-added content of our product mix, including continuing to supply aluminum to the automotive, aerospace and other key industries throughout South Carolina and the US,” commented Michael Bless, President and CEO, Century Aluminium Company.
The current power contract for the site expires in December 2015 and the divestiture will reduce Alcoa’s global smelting capacity to 3.5 million metric tonnes per year.
The sale is subject to customary regulatory approvals and is expected to materialise by the end of the fourth quarter in 2014.