More money committed to Kitimat smelter modernization

It's another major step forward for the $2.5 billion Kitimat Modernization Project.

Rio Tinto, the parent company of Rio Tinto Alcan, has announced a major investment to improve production efficiency of its Canadian aluminum smelters through modernization and expansion.

While the largest chunk of that money will go to a plant in Quebec, $300 million （U.S.） will be spent on further construction in Kitimat.

Rio Tinto Alcan CEO Jacynthe Cote says the Kitimat modernization is what she called a "truly transformational project" and will make the operation one of the lowest-cost smelters in the world.

RTA Vice President of B.C. Operations, Paul Henning, says the money announced by Rio Tinto is now "booked" and will be spent in the coming year.

"And booked against specific things that have to be done. So of course it confirms, it firms and now we can actually roll out to contract, award, bid and tender."

Modernization Project Director, Michel Lamarre, calls it a great way to finish the year.

"It's excellent. So there's $300 million extra that we have for next year, that we will commit and we will spend. Put it into perspective -- it represents the last three years that we have worked on this project, we're going to do it all in one year."

In addition to cleaning up the demolition of pot lines 7 and 8 and some underground work, a camp for construction workers will also be built.

Lamarre says a preliminary survey has been done to ensure vacant accommodation in town is utilized.

"We have completed the first survey. We're going to obviously do another one and keep monitoring to ensure that we're not overbuilding the camp and that we are still putting people in the available hotels, housing, rentals that are available in the area."

The company says the modernization will increase the smelter's production capacity by nearly 50 per cent to approximately 420,000 tonnes per year.

And new AP smelting technology means emissions will be reduced by nearly 50 per cent.

Mayor Joanne Monaghan says she's encouraged by today's news, but there will continue to be skepticism around town until the project receives final approval.

"What I've been hearing is that people say, well this is good news however we'll really be happy when the big announcement comes that they are going to modernize and continue the project."

Henning says the goal is to use as many local contractors as possible, having invited more than 70 to a vendor-supplier information session on Tuesday to learn about the upcoming opportunities.

"It gives these teams a real competitive edge in being able to continue their participation in the existing operations as well as in the future project."

Final approval for the project is expected sometime next year.