Columbia Falls Aluminum Co. prepares to turn 50
The aluminum plant was built by Anaconda Copper Mining Co. and opened in 1955, helping to retain the work force gathered in Flathead County for construction of the Hungry Horse Dam.
Columbia Falls Aluminum Co. is approaching its 50th birthday in a holding pattern, with market forces keeping the plant running far below capacity and obscuring the future.
There is some good news, however, in the fact that things haven't gotten worse. A Bonneville Power Administration rate decrease that took effect Friday is more good news, but it's still far from clear what the next year will bring.
"We're hopeful that we can get to more production," general manager Steve Knight said. "Right now things are pretty static, and so are we."
The plant has been operating only one of its five potlines since March 2003 and employment has hovered around 150 workers.
"Twenty percent is not a great place to run," Knight said. "The plant is not designed to run down that far."
Three market-driven factors determine the fate of aluminum smelters like CFAC - the price of the raw material (alumina), the cost of electricity and the price of the finished product.
All of those are high right now. Aluminum prices are running about $1,800 per metric ton, which is good. But the cost of alumina has been up for some time because of high demand, and electricity is more expensive here than in many other places in the world.
As in other raw material markets, China is viewed as the cause of high prices. Aluminum production has spiked there, and the country has started added more capacity - although some of those efforts apparently are in check now, Knight said, because China has run into power issues of its own.
The company's electric picture has improved slightly now that BPA lowered wholesale rates 7.5 percent. CFAC's current operations are powered completely by the BPA, a government-owned entity that sells electricity generated by dams in the Northwest.
With margins as tight as they are, Knight said, "That helps us. We're in a really precarious situation. That's huge to us."
The company is also negotiating future access to federal power, which currently is less expensive than power available from other markets.
The BPA has proposed making 500 megawatts available to direct customers such as CFAC. Knight said the company would like to get half the power to run its entire plant - about 170 megawatts - from federal sources, adding that with other industrial users clamoring for a slice as well, direct demand may exceed what the BPA is offering.
The aluminum plant was built by Anaconda Copper Mining Co. and opened in 1955, helping to retain the work force gathered in Flathead County for construction of the Hungry Horse Dam.
CFAC was purchased in 1999 by Glencore AG, a Swiss-based company with commodity interests that include aluminum and other metals, coal, oil and agricultural products.
Reporter Alan Choate may be reached at 758-4438 or by e-mail at achoate@dailyinterlake.com