Significant Layoffs Announced at Second-Largest US Aluminum Plant in Missouri
The second-largest aluminum smelter in the United States, located in southeast Missouri, is facing a major curtailment of its operations, leading to the layoff of most of its employees by January 28. This development was revealed in a local news report, which cited a letter from the management of Magnitude 7 Metals explaining the situation.
According to the letter, the plant's operations have been severely impacted by abnormally cold weather, rendering them non-restorable while in operation. Management expressed intentions to seek new capital from potential investors to possibly restart the smelter in the future.
The Missouri smelter, with an annual capacity of 263,000 tonnes, resumed operations in mid-2018 after being acquired out of bankruptcy by ARG International AG, under the leadership of former Glencore trader Matt Lucke. The facility, located in New Madrid County, employs approximately 450 union workers.
Environmental and Economic Concerns
Data from 2019 revealed that the plant was a significant source of pollution, with emissions leading to some of the dirtiest air in the United States. The high cost of electricity, which accounts for around 40% of production costs, poses a significant challenge for aluminum plants, making operations increasingly difficult in the current economic climate.
This move is a stark indication of the ongoing struggles within the primary aluminum industry in the United States. Industrious Labs, a nonprofit focusing on energy transition, emphasized the need for swift action from the Biden Administration to secure renewable, affordable energy sources to support the aluminum sector, which is vital for the American economy.
The decline of the US aluminum industry is evident from the reduction of operational plants from 23 in 1998 to just five today, including Magnitude 7. Recent closures, such as Alcoa's Intalco smelter in Washington state and Century Aluminum's Hawesville smelter in Kentucky, further underscore the industry's challenges, largely attributed to skyrocketing power costs.
