Alcoa Buys Raw Materials From Ormet

Federal court records show Pittsburgh-based Alcoa Inc. will pay about $11 million to purchase 51,841 metric tons of carbon anodes from Ormet Corp., as the bankrupt company continues selling off raw materials needed to make aluminum.

Judge Mary Walrath of the U.S. District Bankruptcy Court in Delaware approved the sale to Alcoa after Ormet attorneys conducted an auction, court records show. Alcoa defines the anodes as large carbon blocks that act as electrical conductors to allow the aluminum smelting process to take place at a plant such as Ormet’s Hannibal Reduction facility.

Unloading the anodes is just the latest step for Ormet, which closed its smelter in October. Court records show the company has also sold $3 million worth of copper rods to Libertas Copper; sold alumina to Switzerland-based Trafigura for $281 per metric ton; and sold its Burnside, La. alumina refinery to Almatis Inc.

In bankruptcy since February, Ormet shuttered its Hannibal aluminum smelter in October amid high American Electric Power bills and low global metal prices. This left nearly 1,000 workers without jobs. CEO Mike Tanchuk announced the closure of the plant that opened in 1958 after the Public Utilities Commission of Ohio declined to lower Ormet’s electricity costs from $60 to $45.89 per megawatt-hour as the company requested.

In August and September, hearings at the PUCO office in Columbus allowed Ormet officials to state the case for why they should receive AEP rate relief.

However, the PUCO made its ruling in early October, leading Tanchuk to announce that Ormet would suspend all operations and begin shuttering the plant just a few days later.

Now, displaced Ormet employees represented by the United Steelworkers are taking their fight to Columbus, as they are planning an “informational picket” outside the AEP corporate headquarters today. They maintain Ormet paid only $38 per megawatt-hour for electricity in 2009, but AEP raised this to $62.80 per megawatt-hour in 2013.

The union believes the average rate aluminum producers in North America now pay is $30 per megawatt-hour.