Alcoa to sell ownership stake in smelter to Century Aluminum

The aluminum firm Alcoa, headquartered in New York, has reached an agreement to sell its ownership stake in the Mount Holly aluminum smelter in Goose Creek, South Carolina,  to Century Aluminum Co., headquartered in Chicago, for $67.5 million in cash, plus an additional potential earn-out. Alcoa presently owns 50.3 percent of Mount Holly, while Century owns 49.7 percent.

“While Mount Holly is a strong facility, its cost structure doesn’t match Alcoa’s criteria for a low-cost portfolio of upstream assets,” says Bob Wilt, president of Alcoa Global Primary Products. “The sale will help achieve Alcoa’s strategy to optimize its commodity portfolio and protect the facility’s jobs and economic contribution to the local community. We would like to thank our community stakeholders and the employees of Mount Holly for their years of support.”

The smelter has a capacity of 229,000 metric tons per year.

The divestiture will reduce Alcoa’s global smelting capacity to 3.5 million metric tons per year, the company notes.

The sale is expected to close by the end of the fourth quarter 2014.

Alcoa says the sale is aligned with its strategy to create a globally competitive commodity business and lower its position on the world aluminum production cost curve to the 38th percentile by 2016. Including this announcement, Alcoa has curtailed, closed or sold 1.3 million metric tons, or 31 percent, of its highest-cost global smelting capacity since 2007.