— Following a Missouri Public Service Commission decision last month against its request for further electric rate relief, Noranda Aluminum is making good on its threat to cut jobs at its New Madrid, Mo., aluminum smelter.
Noranda CEO Kip Smith announced Tuesday that the company has begun elimination of as many as 200 jobs by March 2015, part of what the company said could be a larger transition out of Southeast Missouri by one of the regions largest employers.
The announcement came after the Missouri PSC rejected Noranda’s request for an even lower electric rate from Ameren Missouri that would have shifted more than $500 million in electric costs away from Noranda to Ameren’s other consumers.
“If our rehearing request is successful, and depending on how quickly an affordable rate can be secured, we would be in position to re-evaluate these actions and minimize job losses,” Smith said in a statement. “In the meantime, as we proceed with the planned workforce reduction we are committed to maintaining a safe work environment and we are making every effort to avoid any negative impact to our primary aluminum production and shipments.”
Noranda officials said in a statement the company would also suspend it’s $30 million expansion project in New Madrid and will consider moving the operation to a neighboring state.
While the company has voiced it’s cash concerns to the Missouri PSC, it has been quiet about them with investors. In it’s report, the PSC wrote: “Noranda has not I formed the shareholders of any liquidity crisis or the liquidity event through an 8K filing with the [Securities and Exchange Commission].”
Opponents of Noranda’s request also noted a 2010 filing by the company to the PSC requesting relief based on the New Madrid smelter’s economic importance to Southeast Missouri. There, it employs as many as 900 workers. The PSC noted in its recent order, “the New Madrid smelter did not close because of that decision, but in 2011 Noranda’s board of directors voted to give its shareholder a special dividend totaling $44 million.”
The latest rate case was the latest episode in an ongoing battle between Ameren and it’s largest customer, Nodanda. A spokesman for Noranda said the company would request a rehearing from the PSC.