Government incentives allow Noranda to continue capital projects

NEW MADRID, Mo. -- The largest employer in Southeast Missouri officially announced a $38 million capital investment.

The Sikeston Standard Democrat reported that on Friday, Gov. Jay Nixon visited Noranda Aluminum Holding Corporation in New Madrid to officially announce the expansion of the company's aluminum smelter, which will allow Noranda to greatly increase production capacity.

"This is the continuation of a project that we had started before the economic downturn," said Frank Davis, plant manager at Noranda. "We're just thrilled to be able to announce it -- it means a lot to the facility and enhances our longevity in this region."

The governor's announcement, which included additional economic incentives from the state of Missouri, is a re-launching of a capital project that was put on hold by global economic conditions and the weather-related power outages in Southeast Missouri in January 2009.

The announcement "means a lot to the facility and enhances our longevity in this region," said Davis. "It's good for the employees and it's good for the company to be back in growth mode."

In addition, the community will benefit by the infusion for construction materials, as well as local contractors.

Davis said there are several different projects involved in the expansion, which is expected to be complete by 2013.

The governor awarded a $1 million Energy Efficiency Pilot Grant to Noranda at Friday's announcement. Administered by the Department of Natural Resources and funded by federal Recovery Act money, the grant will allow Noranda to construct a system for producing aluminum more efficiently with less energy use. Previous state incentives awarded to Noranda include $3.5 million in Community Development Block Grant funds, $2.5 million in Development Tax Credits and $2 million in Job Retention Training Program funds.

In mid-2008, Noranda launched a major capital project to increase production capacity at its New Madrid plant. In January 2009, due to a massive weather-related power outage and declining market conditions, Noranda was forced to reduce the near-term scale of its expansion.

In the first quarter of 2010, Noranda completed the process of returning its New Madrid aluminum smelter to full operations. Friday's announcement represents initial steps to complete the suspended $38 million capital project in which Noranda expects to increase the smelter's annual metal production by approximately 30 million pounds by 2013.