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| Alcan wants to control electricity and smelters |
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| Written by INGELA RICHARDSON |
| Monday, 24 May 2010 22:22 |
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I think the following stories - only brushing the surface of years of conflict between British Columbia (BC) and Alcan - are very important for us in South Africa at the moment. Alcan bought Hydro-electric-power stations in BC then proposed to sell electricity at a huge profit back to the people. In the Eastern Cape, we have Alcan emerging in PE and a proposed Hydro-electric-power project at the Mzimvubu River in Transkei. I think it is also vitally important to be aware that deals made between Alcan and the BC government would have remained secret if it were not for pressure from community groups. Also that it emerged that BC government leaders had shares in Alcan - and so were persuaded to do what Alcan wanted in this way. Alcan wants to control - not only the smelter - but the electricity sources also. What this meant for ratepayers in BC areas was long court cases as to what Alcan was allowed to do with electricity. Stories follow: Regards Ingela MEDIA RELEASE March 29, 2007 KITIMAT VS ALCAN: Alcan buys HEP stations, then sells power at huge profit BC Supreme Court decision says Alcan has no obligations in how it uses BC’s largest water resource. Kitimat BC – District of Kitimat (Kitimat) Mayor Richard Wozney and members of Kitimat Council are disappointed with a ruling by the BC Supreme Court that concludes there is no restriction on what Alcan does with electricity generated with the Nechako and Kemano river systems. Mayor Wozney and Council are clearly frustrated with the Provincial Government’s stance and the court’s ruling. "We have been fighting to protect our community and one of the largest water resources in BC for a number of years now, standing in where the Provincial Government should have been. We are trying to make sure the benefits of our public resources go to British Columbians. If the Provincial Government had stood up for the use of this raw material in a value-added and profitable industry, the outcome surely would have been different. Why are they giving away our resources to multinationals?" The Honourable Chief Justice D. Brenner wrote: "…neither the Industrial Development Act nor the 1950 Agreement contain language that would restrict Alcan in the decisions it chooses to make with respect to the sale of hydro-electric power generated at Kemano. Specifically, there is nothing in either instrument that would require Alcan to maintain any specific production level at the Kitimat smelter." Mayor Wozney says the BC Supreme Court and the Province have given away a $10 billion resource. Alcan is now free to close even more aluminum smelting capacity to sell power from the company’s Kemano power station. Since 2001, Alcan has closed profitable smelting capacity at its Kitimat operation to sell power to BC Hydro and export power through Powerex. Alcan refers to this as ‘surplus power’. The Provincial Government took an aggressive stand against the community, arguing that under the Industrial Development Act, which gave Alcan the rights to vast tracts of public land and the watersheds of the Nechako and Kemano river systems, Alcan does not have any obligation to use those public resources for industry and jobs. Mayor Wozney says power sales have enormous implications for Kitimat and the North West region. Recent census results show Kitimat has the highest population loss in Canada. The Mayor and council attribute this largely to almost 500 direct job cuts from the highly profitable Kitimat smelter. "In our efforts to stop power sales and defend the interests of Kitimat and the Northwest we have had disappointments and successes," says Wozney. "This is clearly a disappointment. It is a blow to all northerners and resource communities. Profitable value-added industries are being closed in order to export unprocessed raw materials." "Alcan will continue to increase its power sales unless stopped," says Wozney. "Council takes this matter very seriously and will act with the utmost study and consideration, and always in the best interests of our communities. We are reviewing the decision and considering our options." ALCAN TRIES TO SELL POWER - AT HUGE PROFIT Vancouver – The British Columbia Utilities Commission (BCUC) today rejected a deal between Alcan and BC Hydro that would have allowed Alcan to sell up to 380 megawatts (MW) of power to BC Hydro for the next 20 years. The BCUC is mandated to review all power purchase agreements and decide whether they are in the public interest. "This was a bad deal for British Columbians. We are very pleased that the BCUC agrees" says Kitimat Mayor Richard Wozney. "It would have killed the aluminum industry in BC and pulled the rug out from under the economy of the Northwest." The BCUC hearing was to review one of two confidential deals that accompanied Alcan and the BC Government’s August announcement of a smelter modernization for Alcan’s Kitimat aluminum smelter. The deal is called the Long Term Electricity Supply Agreement, or LTEPA+, a contract between Alcan and BC Hydro. The second deal is the Project Agreement between Alcan and the Province. Both these agreements were made public after pressure from the District of Kitimat and various citizens groups. LTEPA+ was harshly criticized as a sweetheart deal between Alcan and the BC Liberals by a wide range of interveners including: aluminum expert Richard McLaren, MLA for Skeena Riding Robin Austin, the Mayor and Council of Kitimat, the BC Citizens for Public Power and the BC Old Age Pensioners Association. They said the price that was going to be paid to Alcan was unnecessarily high for BC Hydro customers. They pointed out that Alcan is leased a precious public water resource to produce electricity for aluminum smelting, not to sell back to British Columbians at over a 1000% profit. FROM ALCAN This business group represents all Alcan primary metal facilities, power generation installations and trading operations worldwide. The electrolytic process of aluminum production requires large amounts of electrical energy to break down dissolved alumina into its component elements of metallic aluminum and oxygen. A modern smelter requires approximately 13,500 kilowatt-hours of electricity to produce one tonne of aluminum. Approximately 65% of Alcan's primary smelting capacity is powered by its own energy sources. In Canada, where some two-thirds of the Company's primary metal is produced, Alcan owns hydroelectric facilities in both British Columbia and Quebec, supplying most of its present power needs. For smelters outside Canada, electricity is obtained from a variety of sources, including thermal, coal-fired and hydroelectric, in some cases owned by Alcan. Alcan owns and operates 15 primary aluminum smelters in seven countries with a rated capacity of over 2.2 Mt per year. Smelter operations produce a variety of value-added products such as sheet ingot, extrusion billet, wire bar and foundry ingot. Approximately half of the Company's primary aluminum production is consumed in our own fabricating facilities and we are a major supplier to independent extruders and foundries around the globe. We also operate anode production facilities in the Netherlands and Canada, and aluminum fluoride plants in Sweden and Canada. |
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