* Rio Tinto had been considering shutdown at Sebree smelter
* Sebree, in Kentucky, employs more than 500
* Century announces tentative power deal at nearby
April 29 Century Aluminum Co said on
Monday it would buy a Kentucky smelter from Rio Tinto
and announced a tentative deal on power costs for a nearby
smelter it had threatened to close, sending its shares up more
than 9 percent.
Century, partially owned by a subsidiary of Glencore
International PLC, will buy the Sebree smelter in
Henderson County, Kentucky, from the global mining giant for $61
million in cash and receive $71 million in working capital.
Rio said in February it was exploring options for the
facility, including shutdown, after Big Rivers Electric Corp
proposed a rate increase.
Century also reached a tentative agreement to cut power
costs for its nearby Hawesville smelter. It had threatened to
close the facility unless it secured more favorable rates.
Aluminum smelting is a power-hungry process, and producers
pay close attention to electricity costs.
"Gaining access to competitive energy is a crucial for the
continued viability of these plants, and we hope that the
tentative agreement we have reached for Hawesville will be the
first step towards obtaining market-priced power," Century Chief
Executive Michael Bless said in a release.
Century was formed as a holding company for Glencore, and
the Switzerland-based trader and miner is still a substantial
investor, with a 42 percent stake as of June 30, 2012, according
to Thomson Reuters data.
Sebree has more than 500 employees and annual production
capacity of 205,000 tonnes of primary aluminum.
Shares of Century jumped 9.3 percent to $7.37 on the Nasdaq.
(Reporting by Allison Martell; Editing by Frank McGurty)