Alcan Inc. said on Thursday that 1,300 workers at its aluminum smelter in Kitimat, British Columbia, have ratified a new labor contract that was a key condition of a proposed $1.8 billion expansion plan.
Members of the Canadian Auto Workers union voted 61 percent in favor of the pact, which runs to July 23, 2012. The agreement satisfies one of the three conditions Alcan set for its plan to expand the smelter's annual output by 60 percent to 400,000 tonnes a year from 245,000 tonnes.
The two other conditions are obtaining environmental permits and reaching a new agreement to sell surplus power from Alcan's Kemano generating station in the area to BC Hydro.
Alcan has said it hopes to unveil a new power-sale agreement within weeks. The British Columbia Utilities Commission rejected an earlier energy agreement.
Under the new labor contract, production and maintenance workers at Kitimat will get hourly wage increases of 2.5 percent a year, improvements to benefits, and a signing bonus of C$2,300 ($2,078) each, Alcan said.
The company said the pact includes provisions for a smooth transition from old to new technology at the smelter.
Alcan said it will proceed with preliminary engineering for the project.
Alcan shares were up 96 Canadian cents, or 1.5 percent, at C$66.03 on the Toronto Stock Exchange at midday on Thursday, and up 86 cents at $59.62 on the New York Stock Exchange.
($1=$1.11 Canadian)
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