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Noranda to lay off 530 employees, legislative solution to be sought

  

NEW MADRID, Mo. – After an electrical circuit failure incident in recent weeks, shutting 2 of 3 smelting pot lines down, Noranda Aluminum announced Wednesday will be laying off 480 employees by February 4.

Nearly 1,000 Missourians are currently employed by the smelter.

The layoffs are in response to the continuing decrease in aluminum prices and the idling pot lines.

“These actions reflect our intense focus on managing cash and available liquidity in a especially challenging business environment for our integrated upstream business,” said Layla K. “Kip” Smith, Noranda’s president and chief executive officer. “While managing through an extended aluminum price trough, our upstream business has recently faced additional operational and commercial challenges. These challenges include the idling of two pot lines at New Madrid, an unfavorable arbitration panel ruling regarding a bauxite production levy in Jamaica, and the bankruptcy filing by our principal third party bauxite customer. While the actions we’ve announced today are difficult, they are a necessary response to our current challenges as we proactively pursue other measures to reduce our costs in the upstream business.”

The layoffs will be done in rounds, with 190 being planned to be laid off prior to the January 7 electrical circuit failure. Noranda said the other 350 layoffs are necessary after the incident.

Smelter employees were also notified that the site’s remaining operations will be curtailed on or before March 12, 2016 unless the Company is able to secure a substantially more sustainable power rate for the smelter and materially improve the Company’s overall liquidity.

It is expected that Ameren UE will be approaching the Public Service Commission to ask for a rate increase due to the losing the revenue from Noranda.