AB - The Terrace Standard, Wednesday, September 18, 2002

From front

Smelter’s costs are high — Alcan.

employ close to the same number of people as today. |

Prokopanka repeatedly referred to the Kitimat smelter as one of Alcan’s most expensive smelters.

“It’s not quite the high- est cost, but it’s pretty close,” he said. “It’s an extremely high cost smelter.”

He said that’s the result of older technology and the long shipping distance.

Prokopanko said a com-

pany-wide review of all :

operations is underway to identify assets that aren't’ maximizing their value, and either improve their performance or liquidate non-performers.

However Kitimat offi- cials contend Alcan in es- sence uses voodoo ac- counting to turn profits into losses here, manufacturing a crisis that doesn’t exist to scare Victoria: into sub- mission.

Under questioning, Pro- kopanko admitted the company’s accountants: charge the Kitimat smelter. more — on paper — for Ke-- mano power than it casts to produce.

He wouldn’t say what rate is used, but Kitimat manager Trafford Hall maintains the smelter is paying market rates — about six times what the energy actually costs Alcan to produce.

“They’re attempting to show the smelter is a loser to create the impression the smelter is threatened, so the government is de- sperate,” Hall said.

“If you lead the other side to believe there’s a crisis and they stand to lose everything, they're much more willing to ac- cept much less than they would otherwise.”

Hail said it’s not sur- prising charging market tates turns Kitimat into a high cost smelter.

He also noted running at half capacity: but full employment would also have hammered the smel- ter’s financial perfor- mance.

“Run it at full capacity and at Kemano cost power as it was designed to run and this smelter makes a lot of money,” he said, es- timating a potential profit of $450,000 a day at cur- rent prices. .

Kitimat councillor Joanne Monaghan said the company further com- pounds the appearance of inefficiency here by not

cost of making aluminum in $950, but that has de- clined to around 35 to dO per cent while other costs such as labour have tisen.

“Even if we use the re- duced price of power, it's still an expensive operation,” he said.

He said the company is now making decisions on the premise it will get the best possible price for any power it produces.

It’s difficult to price Kemano power, he said, because sales are limited by the roughly 300 mege-

‘watts that can be transmit-

ted through power lines to Terrace right now.

“Yes we could enhance -

that line maybe,” he said. “You have to have an en- vironmental assessment.

You have to. have com-.

munity support. These are the things you have to

. consider.”

He said Alcan now realizes some things may be legally possible but po- litically impossible.

Even if the company could sell all its power to California, he doubted it would happen.

“I don’t think the gov-. emment would ever allow - us to do that,” he said. “It — would cause us to shut down the plant and that’s

shot necessarily what we

are thinking about doing ~—at ail.”

Questioners pressed Prokopanko on why,.’ Alcan’s smelter mcderni- . zation here waits while the company reinvests in Que-

- bec plants.

Profits taken out of this

Tegion are reinvested where it makes the most sense, he said. , ’

“There is an Olympic conipetition going on in Alcan for resources,” he- said. ,

Prokopanko also high-. lighted Alcan’s contribu- tions to the region and the , province, including its $250,000 contribution to- wards B.C.’s 2010 Olympic bid.

“Why would Alcan want to see anything hap- pen to Kitimat?” he asked, “That’s why we’re pushing this Olympic thing — to make this a belter place for us all to live.”

Hall said Alean’s lavish spending to aid the Olym- pic bid is part of a strategy that’s working. = the oro-

vince isn’t taking a stand agains! power sales.

“The Olympic bid is a real important project to Mr. Campbell,” Hall added. “The premier was personally on stage with Alean executives unveil- ing the Alcan Spirit of 2010 initiative.”

Terrace ‘accountant Donna Demers said Proko- panko’s “presentation un- derscored the need to press Victoria to act. 7

“It left me with as many questions as I had to start with,” Demers said. “Alcan’s going to stay here. The question is at what level will they stay and that’s going to be de- termined by what the gov- emment says about those

power sales.”

The Terrace Air Cadet Society will be holding their

ANNUAL GENERAL MEETING

on OCTOBER 10th at 7 p.m, atthe

Terrace Air Cadet Hall. All parents are asked to attend.

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