The firm noted that closing the expensive operation will decrease Alcoa’s worldwide smelting capacity by 150,000 metric tons to around 3.6 million metric tons per year.
The Portovesme smelter, which has been in limited production mode since November 2012, was one of the expensive smelters in the Alcoa Inc (NYSE:AA) system. Earlier in the year. Alcoa also announced the closure of several other economically nonviable facilities in the U.S. and Australia.
Statement from Alcoa
Creating a globally competitive commodity business
Alcoa Inc (NYSE:AA) also mentioned in the statement that the closure of the Portovesme smelter is expected to result in total restructuring-related charges of around $0.14 to $0.15 per share in third quarter 2014. The company also noted that about 60% of these charges are non-cash.
The long-awaited move to shut down the Portovesme Smelter is just another piece of Alcoa Inc (NYSE:AA)’s medium term strategy to build a globally competitive commodity business. The firm also also targets bringing its position on the global aluminum production cost curve down to at least the 38th percentile by year end 2016.