Mt. Holly aluminum smelter considers closing its doors pending agreement with power co.

VIDEO: Mt. Holly aluminum smelter considers closing its doors pending agreement with power co.
Photo Source: AP
Photo Source: AP

GOOSE CREEK, SC (WCSC) - Officials at the Century Aluminum center in Berkeley County say they will have to close their doors unless they can come to an agreement with Santee Cooper on a price to transfer energy.

A news release says the 600 employees at the aluminum smelter received notice they could lose their jobs at the end of 2015 unless Santee Cooper agrees to transmit the energy they need to stay open.

The release says the center in Mt. Holly near Goose creek is the newest primary aluminum plant in the U.S. and the most efficient, except for an uncompetitive power contract with Santee Cooper that has them paying the highest power rate paid by any North American smelter. The news release says about 40 percent of a smelter's cost of operations is power.

Officials at the company say if the plant closes, their 600 employees will lose their jobs by Dec. 31. They say their annual payroll is $50 million a year.

According to an economic analysis by Dr. Joey Von Nessen of the Darla Moore School of Business at the University of South Carolina, Mt. Holly's direct economic impact on the Charleston, Berkeley and Dorchester counties is $945 million a year.

According to the analysis, Mt. Holly's direct and indirect job impact in the region is 2,058 jobs.

The news release says the study found the average income of these jobs is $60,000 a year. "For every 10 jobs created by the Mt. Holly facility, an additional 25 jobs are created elsewhere in the Charleston tri-county area," the economic study states.

"Between now and Dec. 31 when the power contract expires, we will do everything we can to fight to get a new power contract that allows the plant to stay open," the notice to employees said. "We will need your help in this fight."

Santee Cooper released the following statement regarding Century's announcement:

Santee Cooper has learned that Century Aluminum has announced plans to close its Mt. Holly plant. This is sad news. Century and prior owner Alcoa have operated the Mt. Holly plant as a leading corporate citizen in Berkeley County. They have provided jobs, civic leadership and significant community support to the Lowcountry.

Ultimately Century's decision is rooted in a longstanding, depressed aluminum market, with aluminum prices today trading at about half their pre-recession levels. Century's leadership in Chicago has already decided this summer to permanently close a plant in West Virginia and partially shut down a plant in Kentucky, and weak aluminum prices were cited in both announcements.

This is an aluminum industry issue. Aluminum smelting is energy-intensive, and many U.S. smelters have closed or moved overseas. When Mt. Holly was built, there were 30 smelters in the U.S. There are just seven left today.

Santee Cooper offers very competitive industrial power costs – we are the lowest in the state and we would have to increase industrial costs 29 percent to reach the national average.

Santee Cooper has offered Century everything that we could fairly offer to help them keep the plant operating, but in the end Century's leadership consistently required a deal that would unfairly increase costs to our other customers. Santee Cooper has a responsibility to provide reliable, affordable electricity to all of our customers. We are a statewide power utility, providing electricity to end users in all 46 counties, including 27 industrial customers with more than 7,000 employees across the state.

Santee Cooper will continue to be available to discuss terms that can keep Mt. Holly operating and not increase costs to our other customers. 

Copyright 2015 WCSC. All Rights Reserved.