Kitimat Modernization pace to slow slightly in 2013

Rio Tinto Alcan says that cost cutting measures means the pace of construction in Kitimat will be slower next year than initially planned.

Rio Tinto Alcan is easing up on the throttle for their modernization project, but construction will still proceed at an accelerated rate from 2012.

In a call to local media, manager of corporate affairs and community relations Colleen Nyce and the Kitimat Modernization Project project director Michel Lamarre explained that the global economy has forced the aluminum giant to cut costs company-wide.

Locally, that means that their modernized smelter’s online date will be pushed back, and while Lamarre said it isn’t a drastic schedule change he didn’t know yet what their anticipated start-up date is.

“We are in discussion with our engineering firm…there will be a delay which will not be a major delay,” he said.

Essentially what this means here is that spending won’t spike as high as it would have in 2013. They didn’t say precisely how much money was being cut, but 2013’s construction bill is now estimated at just over a billion dollars, compared to just under a billion dollars for 2012.

The number of man-hours needed to complete the project will remain the same, said Lamarre. So the work will just be more stretched out, rather than the construction peaking in terms of worker numbers next year as originally anticipated.

“In 2012… the project was extremely active,” said Lamarre. “I can tell you in 2013 we’ll do more than that.”

Timing works out as well because Lamarre notes construction efficiency goes down in the winter anyway.

The CBC had reported early in October that Rio Tinto Alcan may have been looking at opening up collective agreements in their Quebec regions as a cost cutting measure, however Nyce emphasized that no such action is being taken in B.C., in light of their signing in July with CAW Local 2301 in Kitimat for a 5-year contract.

Meanwhile the future still looks good for aluminum, as Lamarre points out that analysts are showing that there is likely to be a worldwide growth in demand of six per cent, year-over-year.

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