UPDATE 2-Alcoa to cut production, delay new line at Quebec smelter

Thu May 16, 2013 12:27pm EDT

* 500 jobs to be cut through attrition, retirement

May 16 (Reuters) - Aluminum producer Alcoa Inc said on Thursday it was permanently closing two potlines at its Baie-Comeau smelter in Quebec, with total capacity of 105,000 tonnes, and delaying the construction of a new potline at the facility.

The shutdown, set for August, is part of a review of 460,000 tonnes of operating capacity, announced on May 1, due to weak aluminum prices and high costs.

Alcoa said it now plans to put the site's new potline into service in 2019 rather than 2016.

The company said the lines set for closure are "among the highest-cost smelting capacity in the Alcoa system." It said the shutdown would cut greenhouse gas emissions at the plant by 40 percent. The potlines use Soderberg technology, which is less energy efficient than newer ways of smelting aluminum.

Alcoa expects restructuring charges related to the closures of $135 million to $155 million, or 11 cents to 13 cents a share, on an after-tax basis in 2013.

Alcoa spokeswoman Monica Orbe said the Baie-Comeau work force would be reduced by about 500 employees through retirements and attrition. Some 1,400 people work at the facility now.

Alcoa shares were unchanged at midday, trading at $8.50 on the New York Stock Exchange.

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