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Alcoa Aluminum Smelter's Road to Recommissioning by Nichole Bastin Metal Miner, April 11, 2022

Alcoa idled the facility in the spring of 2020.

Meanwhile, the currently idled Alcoa Intalco Works smelter faces one remaining hurdle for its recommissioning.

The smelter and its prospective owners secured taxpayer funding to update the facility. Washington Gov. Jay Inslee signed into law a state construction budget with the $10 million line item to improve efficiency and reduce emissions at the Ferndale facility.

A restart of the smelter remains in limbo, however. The prospective buyer, Blue Wolf Capital, still must establish a preferential long-term power contract with the Bonneville Power Administration (BPA). BPA previously rejected a proposal for reduced-rate electricity at the facility. However, negotiations are ongoing.

The required industrial rate is about 50% less than the current market rate. Should Blue Wolf Capital secure a contract, the smelter could return online as early as this summer, according to one report.

Alcoa idled the facility in the spring of 2020. Plummeting metal prices eroded the smelter’s profitability.

The current tight aluminum market, however, incentivizes its return. Specifically, Intalco’s annual capacity of 240,000 metric tons could replace U.S. imports of unwrought aluminum from Russia. Those imports reached roughly 215,000 tons in 2021.

Keep an eye out for the full Monthly Metals Index (MMI) report later this week, which includes analysis of aluminum prices and aluminum market trends.

Rising demand

New capacity from the sector comes alongside growing global aluminum demand.

According to the International Aluminum Institute (IAI), from 2020 to 2030, forecasts for aluminum demand see nearly 40% growth. The transportation sector, specifically the transition to electric vehicles, will drive the lion’s share of that demand. The sector is projected to consume 31.7 million tons in 2030, up from 19.9 million tons in 2020.

Related Pages:
Speakers Address National Security Risk of Closing Intalco by Brent Lindquist, Lynden Tribune, 4/23/20
New Ferndale Smelter Energy Deal Made to Benefit Both BPA, Alcoa by Dave Gallagher, Bellingham Herald, 4/13/16
Alcoa in Power Deal that may Keep Intalco Aluminum Plant Open by Josephine Mason, Reuters, 4/13/16
Intalco Aluminum Smelter in Ferndale may Stay Open by Dave Gallagher, Bellingham Herald, 4/12/16
Alcoa Hiring Temporary Employees for Ferndale Smelter Work by Dave Gallagher, Bellingham Herald, 2/28/16

Alcoa Intalco Works' timeline of 54 years in Whatcom County

Alcoa Corporation announced Wednesday, April 22, that it will close its Intalco Works aluminum smelter near Ferndale amid declining market conditions, laying off 700 employees. Legislators said they will do what they can to save the facility that has been in Whatcom County for 54 years.

• May 1966: The Ferndale-area smelter begins operation as Intalco Aluminum Corp., owned by Alumax, Pechiney and Howmet.

• 1970: Intalco has 1,350 employees.

• October 1983: Union workers approve three-year contract, ending a two-week strike.

• 1983: Intalco produces 8 percent of the nation's aluminum.

• 1984: Record set with 286,000 tons of aluminum shipped.

• June 1998: Alcoa Inc. and Alumax merge, creating Alcoa Intalco Works.

• May 2000: Alcoa executives consider building their own power plant to run Intalco, out of concern over rising energy rates.

• May 2001: Unable to cope with high energy prices, Intalco temporarily closes the plant, keeps its employees, and sells its power back to Bonneville Power Administration to aid in the energy crisis. BPA pays for the wages and benefits of nearly all the workers, plus $1.75 million to cover Intalco's tax burden.

• May 2002: After being shut down for six months, the smelter reopens two potlines.

• October 2003: Alcoa shuts down a potline because of high energy costs, cutting 200 jobs and leaving only one of three potlines in use.

• June 2006: Alcoa becomes full owner, buying out remaining partners.

• August 2006: Alcoa signs five-year power contract with BPA, ensuring work for its 450 employees.

• February 2007: The smelter restarts its second potline, boosting employment to 575.

• October 2008: BPA proposes long-term contract to power Intalco.

• October/November 2008: In response to the recession and less demand for aluminum, the smelter institutes budget cuts, including cutting about 100 jobs.

• July 2009: BPA and Intalco reach tentative agreement for enough low-cost power to run the plant at or near two-thirds capacity for seven years, guaranteeing at least 528 jobs.

• September 2009: After an August court ruling restricting BPA's authority to share power with Intalco, the July proposal appears to be in jeopardy.

• December 2009: BPA approves a two-phase contract that guarantees enough power to keep 528 workers employed for 17 months. After that, BPA could offer five more years of power if courts approve and economic conditions permit.

• October 2010: BPA agrees to short extension of its contract with Intalco, guaranteeing the smelter's power supply through late May 2012.

• January 2011: Alcoa announces the hiring of 60 more employees and an increase in production.

• October 2011: Union workers vote to strike, but stay on the job while talks continue. After two weeks, workers accept a revised contract offer.

• December 2012: The plant signs a 10-year power contract with BPA.

• 2013: The plant is at 80 percent capacity, with two-and-a-half of three potlines operating, producing about 230,000 metric tons of aluminum a year.

• September 2015: Alcoa announces it is splitting into two companies. Intalco Works focuses on upstream products, including aluminum, considered the weaker of the two companies.

• October 2015: Union workers approve contract extension through March 2017.

• November 2015: Alcoa announces it is idling smelter operations at its Ferndale and Wenatchee plants. The Ferndale shutdown affects more than 400 workers.

• May 2016: Alcoa and BPA finalize a contract amendment that keeps Intalco operating. The amendment lasts through Feb. 14, 2018; the 10-year contract itself runs until September 2022.

• Aug. 13, 2016: Alcoa Intalco Works celebrates 50 years in operation at its annual employee summer picnic.

• Sept. 30, 2016: Alcoa splits into two companies, Alcoa and Arconic. Intalco remains with the Alcoa brand.

• Aug. 5, 2019: Alcoa to put in new pollution equipment to reduce sulfur dioxide emissions. The $15 million project was scheduled to be completed in 2022.

• March 25, 2020: An Intalco worker tests positive for COVID-19.

• April 22, 2020: Alcoa announces it is closing the Intalco smelter in July, laying off around 700 workers.