GOOSE CREEK – Century Aluminum is starting to replace equipment at its Mount Holly facility as part of an agreement with electricity supplier Santee Cooper that will allow the smelter to increase capacity and hire more workers in the coming years.
Craig Conti, Century’s chief financial officer, told analysts during a conference call last week that the company will spend about $ 5 million during the first quarter of this year to restart part of a second line of marijuana at the foundry. In all, the manufacturer plans to invest $ 50 million this year to increase Mount Holly’s annual aluminum manufacturing production capacity to 140,000 tons. The company expects capacity to reach 170,000 tonnes per year – or 75 percent of total production – when the expansion is completed.
Most of the initial work will involve replacing some of the electrolytic cells in the vat line, where aluminum is formed. These components fail over time and Century did not replace them because of uncertainty about a new deal with Santee Cooper.
“We didn’t reconstruct the cells on purpose, as they have typically failed in the past four years or so,” CEO Mike Bless told analysts. “We need to completely reconstruct all the cells in the vessel line that are operating more than half the other line to reach 1 ½ vessel lines.”
Bless said the company is “advancing aggressively in the reconstruction process “and plans to hire another 70 people as part of the capacity expansion. The Mount Holly smelter, located near US Highway 52, near Goose Creek, currently employs about 300 workers.
The increase in capacity is the result of a new contract with Santee Cooper that will allow Century to acquire all the energy needed for Mount Holly – about 300 megawatts – at a fixed price until at least 2023. The new contract is expected to come into force in April .
Santee Cooper said he is developing an “experimental” fee for the plant that will cover the costs, but will not transfer any of Mount Holly’s expenses to other customers.
Energy costs have been controversial in recent years, with Century threatening to shut down the Berkeley County website if a better price cannot be negotiated. In 2015, Century blamed high electricity prices for a 50% reduction in smelter capacity, causing 300 job losses.
Bless, who has criticized Santee Cooper in the past, praised the Moncks Corner-based power supplier last week.
“Our colleagues at Santee Cooper were really creative in helping each other get to this point, and we are very grateful for their substantial commitment of time and resources,” he said, adding that the new three-year agreement gives both sides a lot time to work towards a more lasting solution.
He also thanked the employees of Mount Holly for maintaining their focus on safety and production in recent years, even when the factory’s future was uncertain.
“The real credit for taking us to this point goes to our people at Mount Holly, who consistently managed the plant during an extraordinarily difficult period,” said Bless. “Obviously, they had the problems caused by the pandemic. And these were exacerbated by the uncertainty about whether we could find a sensible energy contract to operate the plant after December 2020. We are very grateful for their commitment and now we are excited to give the opportunity to rebuild and expand the factory. “
Century, based in Chicago, is the largest remaining primary aluminum producer in the United States, with the Mount Holly smelter and two more in Kentucky. The USA was once one of the largest producers in the world, with 22 aluminum smelters. The number of plants in operation has decreased from 14 in 2011 to six today.
Catch up David Wren at 843-937-5550 or on Twitter at @David_Wren_