Alcoa to close smelter in Italy, take 3rd-quarter charge

Mon Aug 25, 2014 11:05am EDT

An Alcoa aluminum plant in Alcoa, Tennessee is seen in this April 8, 2014 file photograph. REUTERS/Wade Payne/Files

An Alcoa aluminum plant in Alcoa, Tennessee is seen in this April 8, 2014 file photograph.

Credit: Reuters/Wade Payne/Files

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(Reuters) - Aluminum producer Alcoa Inc (AA.N) said on Monday it will permanently close its Portovesme smelter on the Italian island of Sardinia.

The closure of the plant, which has not operated since November 2012, will reduce Alcoa's global smelting capacity by 150,000 metric tons to 3.6 million metric tons per year.

Aluminum producers are cutting production and closing plants as they struggle with low prices, high energy costs and rising production in China.

The company said it expects aftertax restructuring charges linked to the closure of between $170 million and $180 million, or 14 cents to 15 cents a share, in the third quarter. The charges will be approximately 60 percent noncash.

As part of its push to cut costs, Alcoa has idled or permanently shut down a number of aluminum smelters over the last two years. In July it finished closing down the 51-year-old Point Henry smelter in Australia, cutting 190,000 tonnes of annual capacity.

At the same time, Alcoa is pushing to reinvent itself as a manufacturer of specialty components for the aerospace and automotive industries, including some that contain no aluminum at all, a generally higher-margin business. Its shares are up more than 50 percent year to date.

Shares added 0.1 percent at $16.47 on the New York Stock Exchange on Monday.

(Reporting by Swetha Gopinath in Bangalore; Editing by Ted Kerr, Chizu Nomiyama and Jeffrey Benkoe)

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