Alcoa changes its strategy and proposes, for the first time in the last two years, to continue manufacturing aluminum in Spain. The American multinational announced on Monday its intention to maintain ownership of the San Cibrao plant (Cervo, Lugo) with one condition: apply a temporary cessation of the main activity (electrolysis tanks and anode plant) with a paid leave for the staff for two years. The proposal is to reactivate the factory in January 2024 with better electricity price conditions, for which the company undertakes to “work urgently to sign minimally competitive energy supply pre-agreements as of 2024, these pre-agreements being the premise to start the temporary cessation of two years ”. With this proposal, the company moves to deflate the entrenched labor dispute of its last aluminum plant in the country a month after the Supreme Court declared null the ERE (employment regulation file) with which it intended to close the factory.
“With the energy prices at exorbitant levels, it is in everyone’s interest to temporarily cease production once reasonable energy pre-agreements are obtained, with the commitment of its complete restart in two years ”, explained the commercial manager, Tim Reyes. The company presented this proposal yesterday to the workers’ representatives, who have been on an indefinite strike since September. Before issuing its assessment, the works council requested a meeting with the Government and the Xunta to analyze this possible solution that Alcoa describes as “an effort to find a solution to the plant’s unviability”.
Alcoa has been complaining for years that high energy prices are weighing on its business in Spain. The manufacture of aluminum is a hyperelectrointensive activity, in which the electricity bill usually accounts for 40% of production costs. Now the company assures that it is “more than 60%”.
Alcoa did business in Spain thanks to an armored price for electricity between 1998 – when it bought Inespal – and 2013. Later, the Government created interruptibility auctions, with discounts that periodically reduced Alcoa’s electricity costs in San Cibrao, A Coruña and Aviles. According to the Government, the multinational was the main beneficiary of this system and received one billion in aid in a decade.
The endowment of electricity bids was reduced until this system was extinguished last year. In this context of increasing electricity costs Alcoa decided to sell its plants in A Coruña and Avilés first and then San Cibrao. The first two went into the hands of an investment fund (Parter) that renamed them Alu Ibérica and resold them to Grupo Riesgo. This entire operation is being investigated in the National Court for possible fraud, in a process in which the workers ask for the reversal, with which they could return to Alcoa. The electrolysis tanks were shut down before the sale and no primary aluminum has come out of A Grela.
Now Alcoa is making a new attempt to stop the heart of the factory in San Cibrao, a direct attack on the motto of As cubas non se paran that the staff has carried by flag. He promises to restart them — a complex and expensive process — and offers them two years’ pay without working. The smelter would continue to operate and the alumina refining plant is on the sidelines. The San Cibrao complex has about 1,200 workers, 600 in aluminum and 600 in alumina.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.