SEPT-ÎLES, September 10, 2015 – Aluminerie Alouette and the Government of Québec announced that an agreement in principle regarding electricity rates for the existing phases of the aluminium smelter has been entered into, which will maximize the competitiveness of the business located in Sept-Îles. This announcement was made in the presence of the Premier of Québec, Mr. Philippe Couillard, the Minister of the Economy, Innovation and Exports, Mr. Jacques Daoust, the Minister of Energy and Natural Resources, the Minister responsible for the Plan Nord and the Minister responsible for the Côte-Nord region, Mr. Pierre Arcand, the Chairman of the Aluminerie Alouette owners’ committee, Mr. Yvon D’Anjou, the President and Chief Executive Officer, Mr. Claude Boulanger, numerous employees, owners’ representatives and members of the Côte-Nord community.
The conclusion of this agreement, which will become effective in 2017 and will expire in 2029, occurs at a key moment for Aluminerie Alouette, as the aluminum world market is increasingly competitive and the prices of this metal are particularly low. The agreement provides notably for the following:
- a risk-sharing pricing formula based on aluminum prices. In addition to efforts to improve the business’ costs, this measure reinforces the competitiveness of the largest producer of primary aluminum of the Americas;
- access, for the current phases, to a new 70 MW energy block at a competitive rate;
- beginning in 2017, Aluminerie Alouette will make primary aluminum available for Québec manufacturers in order to maximize the aluminum transformation in the province. This measure is part of the Québec Aluminium Development Strategy announced by the Government of Québec in June 2015;
Aluminerie Alouette further undertakes to pursue investments of $400 million by 2020, particularly through technological development. Moreover, it can now move a further step towards a possible expansion of its activities by launching pre-feasibility studies for its Phase 3. If market conditions are favourable and the results of the pre-feasibility and engineering studies are positive, this project could be launched in a window of opportunity located between December 2017 and December 2019. As to the electricity rates linked to this possible Phase 3, they would be negotiated at an agreed time.
“By sealing today a mutually beneficial agreement, the Government of Québec and Aluminerie Alouette consolidate a partnership which has been in existence for a quarter of a century and demonstrate a firm commitment to the Québec manufacturing industry and especially the Côte-Nord economy. The listening and collaboration of the Government contribute today to the sustainability of our current facilities and allow us to consider a possible expansion of our activities. Although many challenges to our industry lie ahead, we are committed to contribute even more actively to the prosperity of Québec” said the President and Chief Executive Officer of Aluminerie Alouette, Mr. Claude Boulanger.
It is to be noted that Aluminerie Alouette generates $440 million in economic benefits in Québec, including $340 million specifically in the Sept-Îles RCM. It sources from 700 suppliers, 150 of which are based in the Côte-Nord region, in addition to making a hundred million dollars worth of local purchases. The enterprise is an exemplary corporate citizen, actively involved in its community, which creates jobs and wealth in its region and everywhere in Québec.
“The involvement of the Government of Québec in this agreement recognizes our status as leader, the performance of our organization and the excellence of our employees and partners. During the past few years, we invested tens of millions of dollars in the development and implementation of new cell smelting technology. The additional power available will allow us to bring out the best of this technology while remaining a leader in energy efficiency” added Mr. Boulanger.
Moreover, Aluminerie Alouette will maintain its efforts to cause the Côte-Nord area to have a natural gas terminal, a major and vital asset for the economic development of the region. Furthermore, if it is commercially viable, the project for natural gas-fired anode baking furnaces would be completed by 2020, bringing substantial environmental gains by greatly reducing greenhouse gas emissions.
