| NEW YORK
NEW YORK Feb 5 Alcoa Inc. (AA.N) will continue
discussing ways to resolve energy costs at its aluminum
smelters in Italy and will not curtail its two plants there on
Feb. 6 as previously announced, a spokesman said on Friday.
"We are continuing to analyze and continuing to talk. We're
hopeful that the Italian government and the European Commission
can help us resolve this situation. And we'll take it from
there," Kevin Lowery, spokesman for the U.S. aluminum giant,
Asked whether Alcoa still plans to shut its Fusina smelter
near Venice and Portovesme plant in Sardinia, he said, "We
haven't taken any actions. We're going to continue to talk."
In November, Alcoa said it would temporarily idle
operations at its 194,000-tonne-per-year smelters after the
European Commission ordered it to pay back most of the state
aid it received in Italy since 2006.
A meeting between the Italian government, Alcoa executives
and Italian trade unions scheduled for Feb. 8 to discuss the
matter was moved to Thursday, Feb. 11, an Italian government
source in Rome told Reuters late on Friday without
The European Union's executive body ruled that Alcoa must
repay state power subsidies previously agreed to by the Italian
government and the U.S. aluminum producer.
Alcoa argues that a $300 million penalty imposed by the
Commission, currently under appeal, would have a "devastating
impact" given the dramatic decline in aluminum prices amid the
Aluminum prices slid more than 60 percent off record highs
reached in July 2008 to the 7-1/2-year low hit a year ago.
"We have a greater than $300 million payment we have to
make and we are losing money each month we operate there on top
of that. So there needs to be some kind of resolution," said
He has said that the issue was over energy costs that both
the company and the Italian government wanted addressed, "so
the operations can provide jobs."
"Our position is that we want to operate. We're hopeful
that the Italian government and the EC (European Commission)
can get together and help us be in a position so that we can
operate there," he said Friday.
Italian Prime Minister Silvio Berlusconi, who is battling
to control rising unemployment and faces important regional
elections in March, wrote a letter to Alcoa CEO Klaus Kleinfeld
last Friday asking him to wait until the European Commission
studies the situation before shutting the smelters on Feb. 6.
Italian unemployment rose to 8.5 percent in December, its
highest since monthly records began in January 2004, and Italy
has one of the industrialized world's lowest workforce
participation rates at only 22 million people from the 60
Alcoa's Italian operations employ about 2,000 people.
(Additional reporting by Gavin Jones in Rome; Editing by