Rio Tinto Alcan commits $2.7 billion to Kitimat modernization

Being the Premier of the province or CEO of a division of a multi-national company may be positions of power.

Being the Premier of the province or CEO of a division of a multi-national company may be positions of power.

But last Thursday Mother Nature showed she was the ultimate boss, producing a white-out at the Northwest Regional Airport that prevented Christy Clark and Jacynthe Cote from attending the Rio Tinto Alcan announcement about the Kitimat Modernization Project.

However, in the best traditions, the show went on.

And the more than 200 people who packed the dining hall of the construction camp – converted into an auditorium for the event – rose as one to deliver a prolonged standing ovation when Jean Simon, president of Primary Metal for RTA, said the magic words: “Ladies and gentlemen, this is formally a go.”

Simon told the crowd that the Rio Tinto board of directors had officially approved an additional $2.7 billion to take KMP to completion.

That was in addition to the more than $600,000 spent to date.

Simon said KMP fit with Rio Tinto Alcan’s focus on “Long life, large scale, low cost assets”.

And that the Kitimat smelter had leveraged two of RTA’s greatest competitive advantages: “clean, self-generated hydro power and leading edge AP technology”.

“Once completed, Kitimat will be one of the lowest cost smelters in the world,” he emphasized.

It would also guarantee 1,000 long term jobs while generating many spin-offs for local businesses and the community as well as tax revenues for the municipality.

The new smelter will produce about 420,000 tonnes per year and reduce greenhouse gas emissions by about 50 per cent.

Simon said RTA would be making every effort to ensure local suppliers and businesses continued to benefit as much as possible “now and in the future”.

Likening the final approval to an early Christmas present, he added, “I am thrilled to bring such good news to Kitimat.”

“This is an announcement our community has been waiting for for a very, very long time – and we are really happy to be here to celebrate,” Mayor Joanne Monaghan pointed out.

Recalling the closures in recent years of Methanex and Eurocan, Monaghan said the go-ahead for KMP means that the aluminum business is here to stay for the next 35 to 50 years.

And she credited RTA with contributing to the rush of interest in Kitimat from other sectors such as liquefied natural gas exports and bio-mass.

Monaghan said RTA’s initial multi-million dollar investments in KMP had let the world know that Kitimat was “a strategic place to invest”.

She also thanked Paul Henning, vice-president of BC Operations and Strategic Project Western Canada, and his team for standing by Kitimat during difficult times.

Michel Lamarre, RTA’s project director for the modernisation, said first metal in the new smelter will be poured in the first half of 2014.

On the immediate horizon was the expansion of the construction camp. That would take place in January taking the capacity to 1,500 workers.

Asked about the potential crush of projects here and wether that would present problems for KMP, Henning said, “the good news is we’re first. The folks that grab the ball usually have a chance.”

He also suggested that given the proposed timelines of the various projects, the region was in for an extended period of boom.

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