Alcoa to Restart Smelting Operations in Newburgh

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Alcoa's Warrick Operations facility covers 9,000 acres. Alcoa's Warrick Operations facility covers 9,000 acres.

Pennsylvania-based Alcoa Corp. (NYSE: AA) has announced plans to restart three idled lines at its aluminum smelting facility in Newburgh. The Indiana Economic Development Corp. says the company will invest up to $35 million to restart the lines, which were closed last year, by the second quarter of 2018. The company plans to add 275 employees, some of whom will be recalled from layoff status.

The restarted lines will support Alcoa's existing rolling mill at the Warrick County plant. The facility produces flat-rolled aluminum for the food and beverage industry in North America. Work to restart the lines has already begun and the company says, once operational, the lines will have an annual smelting capacity of 161,400 metric tons.

"By restarting a portion of the Warrick smelter, we will provide an efficient source of metal for the co-located rolling mill and help it meet an anticipated increase in production volumes," Tim Reyes, president of Alcoa’s aluminum business unit, said in a news release. "The action will enable us to more fully utilize the assets at this integrated site for the benefit of our investors, customers, employees and the community."

When the closure of the smelting operations were announced in January 2016, the company said about 600 workers would be affected by the move. Most of the jobs were cut indefinitely as of April 2016. The company attributed the decision to falling aluminum prices on the global market. 

The majority of the new jobs created by the announcement will be high-wage positions, expected to pay an average wage 45 percent higher than the state average. The IEDC has offered the company up to $2.4 million in conditional, performance-based tax credits and up to $100,000 in training grants.

In 2015, Alcoa announced a split into two independent companies. The southeast Indiana operations are part of the “upstream” business, which includes five business units: Bauxite, Alumina, Aluminum, Casting and Energy. Arconic (NYSE: ARNC), the other independent spin-off, includes Forgings and Extrusions operations in Lafayette, which completed an expansion in 2014, and the high-profile Power and Propulsion facilities in La Porte.

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