CFAC still striving for power deal
Columbia Falls Aluminum Co. will remain in operation until Sept. 30 pending contract negotiations with the Bonneville Power Administration.
"One of the issues we're trying to work out with Bonneville is how long the contract will be," CFAC spokesman Haley Beaudry said. "We have a ways to go. The existing arrangement expires on Sept. 30. Time is nipping at our heels."
CFAC has in the past negotiated five-year contracts with Bonneville. The latest contract was supposed to extend from Oct. 1, 2006 until Sept. 30, 2011, but because of a lawsuit filed by a number of West Coast cooperatives, the 9th U.S. Circuit Court ruled that CFAC's contract didn't fit with the Northwest Power Act and was therefore void.
CFAC and Alcoa, which once was the largest aluminum manufacturer in the world, entered into bridge agreements that spanned the time from which the contracts with Bonneville were voided - Dec. 1, 2008 - until Sept. 30, 2009. Alcoa has negotiated for a seven-year contract with Bonneville.
With the help of Sens. Max Baucus and Jon Tester, CFAC has been negotiating a new power deal.
"We don't know what kind of contract we'll have, but our goal is to keep the plant running and running profitably," Beaudry said. "The bottom line is that it's still up in the air and we're still working on it. This issue is Montana jobs and Montana people - it's on the front burner for both [Baucus and Tester]."
As of Friday afternoon, Beaudry's office was waiting for a terms sheet from Bonneville, which will lay out a tentative length of a contract, amount of power supplied and cost of power.
Another factor in the aluminum industry right now is supply, which might be affected in CFAC's favor by a dam disaster in Siberia.
Worldwide, supply currently exceeds demand for aluminum.
On Aug. 17 an explosion at the Siberian hydroelectric station Sayano-Shushenkaya killed at least 69 people (with six more still missing and presumed dead) and crippled the plant that supplies power to four Rusal - a Russian aluminum company - smelters.
Rusal officials have warned that the company may lose up to 500,000 metric tons of output.
The acting chairman of plant operator RusHydro, Vasily Zubakin, said that it would likely take three years to get the facility back in service, the state news agency RIA-Novosti reported.
"There is talk that there may be 500,000 tonnes of production capacity probably going to be curtailed," Beaudry said. "That may have an indirect effect on the marketplace, but it won't be fast and it won't be huge."
The Associated Press contributed to this report.
Reporter K.J. Hascall may be reached at 758-4439 or by e-mail at kjhascall@dailyinterlake.com