Alcoa closes Intalco smelter, prepares site for redevelopment

Alcoa Corp., headquartered in Pittsburgh, has announced the closure of its Intalco primary aluminum smelter in Ferndale, Washington, which has been fully idle since 2020. The site will be prepared for economic development opportunities.

“The Intalco smelter site operated for nearly 55 years, and we’ve spent significant time evaluating options for the asset, including a potential sale,” Alcoa President and CEO Roy Harvey says. “Our analysis, however, indicates that the facility cannot be competitive for the long-term.

“The site is an important part of our history, and we are encouraged by the prospects for potential economic development via another entity that will own and control land at the site,” Harvey continues. “We will continue to engage with our stakeholders, including community members and government officials, as we make this transition.”

In February, workers keeping watch over the smelter said the company had begun to move equipment off-site. Members of the union told KING-TV they urged Alcoa not to begin demolition of the site. 

RELATED: Union foresees demolition of Alcoa Washington smelter

At that time, Brian Urban of the International Association of Machinists and Aerospace Workers (IAMAW) union told KING-TV he thought efforts to find a new owner for the plant were making “real progress.”

“That process is ongoing and showing great results, but we do need a longer time for the feasibility assessment to be made,” Urban told the TV station. “It looks good. That’s why we’re trying to make the case to urge Alcoa not to start the demolition.”

Now, however, Alcoa says that pursuant to an agreement with AltaGas, that company has acquired the rights to develop and own approximately 1,600 acres at the Intalco site, which includes transportation and utility infrastructure.

“AltaGas is currently exploring potential development which would align with Washington state and Whatcom County’s climate ambitions and provide long-term, sustainable benefits to the community and the local economy,” Midstream President Randy Toone of AltaGas says. “We understand the rich legacy and importance of this site to the community. We look forward to working with local stakeholders, Tribes and Alcoa to ensure potential development benefits the region and positively contributes to the ongoing energy transition.”

Permanently closing Intalco’s 279,000 metric tons of annual capacity will bring Alcoa’s global consolidated capacity to 2.69 million metric tons, including a combined 399,000 metric tons at two other smelters in the United States, the company says.

Alcoa will record restructuring and related charges in the first quarter of 2023 of approximately $120 million (pre- and after-tax), or 67 cents per share, related to the permanent closure. The company says it expects cash outlays related to the permanent closure of the site to be approximately $85 million over the next three years, with approximately $25 million to be spent in 2023.

The Intalco smelter was fully curtailed in the third quarter of 2020 amid declining market conditions and high input costs. The smelter, which began operation in 1966, lacks access to competitively priced power and would have required significant capital expenditures to restart, according to the company.

The site currently has 19 employees, some of whom will remain to assist with the closure-related activities that allow opportunities for future redevelopment. Alcoa says support services will be provided for those displaced by the closure decision.

The mayor of Ferndale, a city of about 15,000 people approximately 100 miles north of Seattle, told KING-TV in February, “This feels like it closes a chapter, so we get to start looking at what the next chapter is.”