Noranda Aluminum announced Tuesday that it is laying off up to 200 employees and suspending an expansion project at its southeast Missouri smelter because state regulators refused to lower its electricity rates, Fox Business reported.
The cutbacks by Noranda come less than two weeks after the Missouri Public Service Commission denied its request for a roughly 25 percent reduction in electricity rates that it pays to Ameren Missouri.
Noranda employs nearly 900 people at the smelter, which it says produces 14 percent of the nation’s primary aluminum. Electricity comprises about one-third of its production costs, and the company had sought a $48 million reduction in its annual electricity bill. That would have resulted in higher rates for other customers of Ameren Missouri.
While rejecting the request, Missouri utility regulators said they remained unconvinced that Noranda faced a “liquidity crisis” and that other consumers would be hurt more if Noranda quit getting its electricity from Ameren than if it received a rate cut.
The aluminum 3-month price saw the biggest upwards shift for the day, rising 0.2 percent on the LME to close at $2,099 per metric ton on Wednesday, September 3. Following a couple days of improvement, the cash price of primary Indian aluminum weakened by 0.2 percent. Prices closed at INR 128.45 ($2.12) per kilogram. On the LME, the cash price of primary aluminum saw little change in its price yesterday at $2,083 per metric ton.
Chinese aluminum prices closed flat for the day. For the fifth day in a row, the price of Chinese aluminum scrap remained essentially flat at CNY 12,250 ($1,988) per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,590 ($2,206) per metric ton. The price of Chinese aluminum bar remained essentially flat at CNY 14,200 ($2,305) per metric ton. The cash price of Chinese aluminum saw essentially no change for the fifth day in a row, remaining around CNY 13,960 ($2,266) per metric ton.