The American company Alcoa is to remodel its plant in San Ciprián (Lugo), an operation that will last two years and in which it will invest $103 million. This way, the plant will avoid the closure that was announced in 2020. However, facilities will be shut down while they undergo a major remodel to ensure long-term viability. This pause will not affect jobs, which are protected for the next four years in an agreement with the works council.

The San Ciprián industrial complex is made up of an alumina plant and an aluminium plant. Alcoa owns 60% of the alumina plant, which will continue its normal operations. It is the aluminium plant, 100% owned by the company, which will halt its electrolysis tanks and anode plant with a commitment to restarting them in January 2024. Smelting will continue as normal to guarantee the supply of metal to customers.

Wages to be fully maintained
The agreement protects the jobs of workers and contractors, and is accompanied by an investment of $103 million. Most of this, $68 million, will be earmarked for improvements to the main electrical substation, anode plant and smelting furnaces. The aim is to increase production capacity and the quality of value-added products such as aluminium billets for extrusion. The remaining $35 million will be invested in restart costs. As a guarantee, the company will set up a restricted deposit for the total amount. 

The document, which has already been endorsed by workers, guarantees their wages will be fully maintained. While operations are halted, they may perform other tasks and participate in training plans. They may also request paid leave for limited periods. In addition, a new agreement will be signed which includes wage increases of 2% per year from 2020 until the end of 2025. During this period, Alcoa has agreed not to carry out any workforce adjustment plans. Other social benefits will also be maintained and workers from temporary employment agencies will continue to be hired.

Contracting companies affected by this temporary curtailment of operations will not be affected either. The company will extend current contracts for a period of three years, and commits to prioritising the contracting of local transport and supply companies.

Energy prices
The San Ciprián aluminium plant has experienced financial losses that it describes as extraordinary due to energy prices. The company recorded losses of $65 million in 2021. In 2022, it estimates that these will be reduced to between $20 and $25 million thanks to the curtailment of electrolysis operations. Indeed, one of Alcoa’s main objectives during these two years will be to secure long-term energy purchase agreements.

Tim Reyes, Alcoa Executive Vice President and Chief Commercial Officer of the Alcoa Corporation, believes that this is the best solution for the future of the plant and explains that, “We have listened carefully to the different ideas for improving the plant, and we believe that we have developed a very fair and generous plan that incorporates many of the ideas we heard at the negotiation table.”

^{Photo: Alcoa}