Noranda to lay off 350; plant may halt operations

Noranda Aluminum Inc. has announced it will lay off 350 employees at the company's New Madrid, Missouri, aluminum smelter by Feb. 4.

In a news release on the company's website, Noranda cited low aluminum prices, the idling of two pot lines at the New Madrid facility and other business issues as the reasons for the layoffs.

This round of layoffs is in addition to a workforce reduction involving 190 employees, initiated Wednesday.

Most of the employees involved in Wednesday's reduction are from Noranda's integrated upstream business. About 90 percent of those layoffs involved workers at the New Madrid plant. Of those, company officials said, 75 percent were planned before the Jan. 7 electrical circuit failure that idled two pot lines.

Smelter employees also were notified the site's remaining operations will be curtailed on or before March 12 unless a more sustainable electrical-power rate can be secured and the company improves its liquidity. The smelter reportedly employs 900 workers.

This potential halt in production was foretold by Noranda last year during an ongoing issue between the smelter and Ameren Missouri. In mid-2014, the Missouri Public Service Commission issued an order denying Noranda's request for a lower rate from the utility. The smelter is Ameren's largest electricity customer.

Since that time, Noranda has said it would reduce its workforce and scale back infrastructure investments if it is not granted a reduction.

Noranda would save $17 million to $25 million a year on power costs under the new rate they seek.

Ameren has not offered Noranda a reduction and informed the smelter it would allow their contract to expire in 2020, requiring Noranda to find a new electricity supplier or negotiate a new contract with Ameren.

"As Noranda's flat-rolled products business sources metal from a portfolio of suppliers, the company believes it has access to sufficient sources of aluminum to meet customer commitments for flat-rolled products," the company's news release said. "Accordingly, the company believes the curtailment of aluminum smelting operations will not adversely impact the operations of the flat-rolled products business."

The company indicated it is seeking tax and product levy relief at its bauxite mining operations in Jamaica, along with cost reductions at its alumina refinery in Gramercy, Louisiana, and its Jamaica mining operations. It also would like to secure suitable replacement volume for alumina provided to the New Madrid smelter.

According to Dwayne Nowlin, New Madrid County collector, the county did not receive a check for the 2015 taxes from Noranda Aluminum. Noranda's 2015 tax bill totals more than $3.6 million.

Noting the recent and impending layoffs, New Madrid Mayor Donnie Brown expressed concern for the people of his city. He said Noranda provided jobs not only for people in New Madrid, but beyond state lines, bringing in workers from western Kentucky and western Tennessee.

"They were the largest employer of the area, and their people are an important part of the community," Brown said. "We hate to see anyone lose their jobs, but that number of people -- it's really devastating to small towns."

Two of the New Madrid facility's three pot lines were idled Jan. 7 during an electrical circuit failure.

The facility also experienced an explosion in August that injured 33 workers, destroyed a caste house building and blew holes in the rest of the plant's walls when molten aluminum came in contact with water. The U.S. Department of Labor's Occupational Safety and Health Administration is investigating.

Dallas Snider, president of the United Steelworkers Union 7686, said the union initially was notified of 133 layoffs Wednesday and another 290 layoffs by Tuesday, followed by the possibility of another 60 or more by Feb. 2.

"We are just hoping for the best," Snider said. "They say they hope it is temporary. And we hope it is just temporary."

Snider said meetings will be held Jan. 19 and Jan. 22 to provide workers with information about unemployment, job placements and programs available to them.

In the release, Noranda president and CEO Layle K. "Kip" Smith called the decision "difficult."

"While the actions we've announced today are difficult, they are a necessary response to our current challenges as we proactively pursue other measures to reduce our costs in the upstream business," Smith said.

The Standard Democrat contributed to this report.

bbrown@semissourian.com

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Pertinent address:

391 St Jude Industrial Park Hwy, New Madrid, MO 63869