By Brian Dunn
IT’S NO SECRET THE SEPT-ÎLES REGION AND ITS PORT LIVES OR DIES BY THE FORTUNES OF THE MINING INDUSTRY. ONE OF THE MAJOR PLAYERS IN THE AREA IS ALUMINERIE ALOUETTE, WHICH LAST OCTOBER CONFIRMED PLANS FOR A $2-BILLION EXPANSION OF ITS FACILITY IN POINTE-NOIRE ACROSS THE BAY FROM SEPT-ÎLES. THE INVESTMENT HINGED ON ALOUETTE GAINING ACCESS TO A 500-MEGAWATT BLOCK OF POWER AT THE LOW RATE FOR VERY LARGE INDUSTRIAL USERS, SINCE POWER ACCOUNTS FOR 30 PER CENT OF ITS PRODUCTION COSTS. THE ALUMINUM SMELTER IS THE LARGEST AND MOST EFFICIENT ON THE NORTH AMERICAN CONTINENT. ITS PRESENT CAPACITY OF 600,000 TONNES IS PLANNED TO INCREASE TO 900,000 TONNES WITH UNDER THE COMPANY’S PHASE III EXPANSION. THE CONSTRUCTION PHASE WILL, ON AVERAGE, SUPPORT ABOUT 1,000 JOBS A YEAR FOR THE DURATION OF THE WORK.
The idea of building an aluminum smelter in Sept-Îles dates back to the seventies when construction of Hydro-Québec’s massive James Bay hydroelectric development created a temporary surplus of electrical power. The project was further advanced in 1985 after a new deepwater terminal (“La Relance”) was built at Pointe-Noire in response to a need to diversify the economic activity of the region.
In 1987, SGF, a provincial investment agency, was successful in putting together an international consortium to build an aluminum smelter in Sept-Îles. The investors were attracted by Sept-Îles’ deepwater port, qualified manpower and availability of abundant and low-cost electrical power. Aluminerie Alouette was established in 1989 under the partnership of the SGF, Austria Metall, Hoogovens of Holland, Kobe Steel Ltd. and Marubeni of Japan and VAW of Germany. The smelter produced its first ingots in June, 1992. Since then, Hoogovens, Kobe and VAW have cashed out. Alouette is currently 40 per cent owned by Rio Tinto Alcan with the balance split between Investissement Québec and four other shareholders.
Alumina used in the production of aluminum is brought in from the U.S., Australia and Brazil. Almost 50 per cent of the aluminum ingots from the smelter are barged from Pointe-Noire to the Great Lakes, where they are transferred to railcars and trucks for delivery to rolling mills in North America. The balance is shipped to Europe and Japan.
With the completion of Phase II a few years ago, the plant now includes two electrolysis facilities each a kilometre in length, two anode producing plants and a casthouse producing 1,500 tonnes a day of aluminum ingots and sows. Employment has increased from 560 to 1,000 non-unionized workers, making Alouette the largest employer in Sept-Îles. Phase III will add a third series of electrolysis cells and an additional 300 jobs.
There are other benefits the region will enjoy. An agreement with Hydro-Québec calls for the implementation of a new university pavilion, a $10 million investment by Alouette. In addition, Alouette will create an industrial chair on carbon research with the Université du Québec à Chicoutimi. Beyond the 300 new smelter jobs, Alouette has made a commitment to create 1,000 other jobs through developing partnerships with equipment manufacturers and suppliers, continuing efforts related to aluminum transformation activities, supporting the development of new raw materials in Quebec and developing businesses with the First Nations communities. A similar agreement was signed in 2002 for the Phase II project, which called for the creation of 1,010 jobs by 2012 which Alouette has already exceeded by helping in the creation of 1,617 jobs by December 31, 2010. Other planned investments include Alouette’s participation in the Quebec Economic Development Fund, a contribution of up to $75 million. The company did more than its part for the environment in 2011 by surpassing its greenhouse gas emission reduction objectives (1.78 tonnes of CO2/tonne of aluminum). In addition, the smelter reduced its fluoride emissions for a ninth consecutive year to 0.31 kg/tonne of aluminum (2007 global levels ranged between 0.5 kg to 4.0 kg/tonne) Furthermore, Alouette’s energy consumption of 12,750 kWh/tonne of aluminum ranks among the lowest in the world. Alouette produced a record 582,004 tonnes of aluminum in 2011, and aims to achieve rated output of 600,000 tonnes in 2012, the year of its 20th anniversary..
An advantage Alouette has over most of its competitors in China and India is its location in North America for product distribution and proximity to Europe for the same reason. Also, despite lower labour costs in India and China, Alouette’s input costs are lower, thus providing it with a competitive advantage.
In June, Alouette won a prize in the “Aluminum Smelter Excellence” category at the American Metal Market awards in New York for its work in health and safety, production, energy efficiency, environmental performance and for the company’s impact on its community. In 2011 Alouette’s employees produced aluminum during 334 consecutive days without any recordable injuries.