Alcan wins long-running battle over Kitimat smelter

Canadian producer Alcan has won a long-running and bitter battle with the city administration of Kitimat in British Columbia over the way if runs the Kemano power plant and Kitimat aluminium smelter.

The Supreme Court of British Columbia has dismissed a petition from Kitimat, which claimed that the producer was beholden under the original operating agreements to run the 277,000tpy smelter at full capacity rather than selling power to state power company BC Hydro.

Alcan has run Kitimat some 30,000tpy below capacity for several years in favour of power sales, much to the anger of the Kitimat local authorities.

Chief Justice Donald Brenner of the Supreme Court stated that "there is nothing in (previous laws and agreements) that would require Alcan to maintain any specific production level at the Kitimat smelter. Alcan is not restricted…from selling its Kemano power or using it for the Kitimat smelter as it considers appropriate."

The company, unsurprisingly, said it was pleased with the decision. The District of Kitimat has said it may yet appeal the ruling.

Alcan has proposed a major investment programme at the Kitimat plant with a view to lifting capacity to 400,000tpy over the 2009-2011 period.

Those plans are on hold after a decision by the British Columbia Utilities Commission not to approve the associated long-term power deal—a key pre-requisite for the smelter expansion. The Commission's judgement is being appealed by Alcan.