Smelter modernisation – where are we now?

After 14 months off the job, I sat down with Rio Tinto Alcan’s Paul Henning to find out what had happened on the Kitimat Modernisation Project in my absence and what was coming up this year.

After 14 months off the job, I sat down with Rio Tinto Alcan’s Paul Henning to find out what had happened on the Kitimat Modernisation Project in my absence and what was coming up this year.

Looking back to the recession of 2009, Henning said it had been disastrous on many fronts – for example costs at the smelter had to be reduced by $40 million – and it was a hard time for the town, made tougher by the Eurocan closure early last year.

And, of course, the downturn delayed board approval of the project. All in all, he said – in masterful understatement – “a bit of a change in direction”.

But for all its woes, he said the plus was KMP came out of it stronger.

“I am convinced 2010 was a much more successful year on all fronts because of 2009.”

One of the pluses was local companies were, given the slower progress of KMP, in a position to take on many of the contracts that were let.

And what a job they did.

Pointing to the anode building as the most visible result – it is the large building at the north end of the smelter – Henning said it was “a great demonstration of what we could do here locally. I am very proud that was built by far by local contractors. They really stepped up.”

Therefore his new tagline was, “This will be built in BC, but it will be built by BC.”

While there would be greater involvement by outside companies as the project accelerated, he said local contractors had established a “street credibility” for the quality and delivery of their work that ensured there will be a place for them as the project moves forward.

And he pointed out that even once the new smelter was completed, RTA would need those local contractors in the same way they do today.

“I need those businesses around the plant to do the things that a modern operating smelter will need. It’s important they are part of the process.”

Looking to this year, Henning said there would be approximately $250 million worth of contracts awarded out of the $300 million RTA announced in August of last year.

That will take the total spent to $550-$600 million.

That to-date total covered engineering, early prep work and equipment that had already been purchased – the substations for example.

The bigger works this year will be the reduction services building will be going up and the construction camp.

Henning said a year ago they were looking at 200 people in the camp this year – the site has already been cleared, drained and prepped.

Now they will be putting in a 500-person camp with construction to start in the spring and the camp in use by the summer.

From his perspective 2001 will be the most complicated year to date because he’s going to have the modernisation going on while the existing smelter is still running.

And part of KMP involved relocating the middle part of the existing plant. In fact a total of 87 buildings have to be moved or changed.

Not only is it the buildings that have to be relocated, the same applies to the people who work in them now.

“That makes for a huge amount of change, of transition,” Henning said.

Since the project was first conceived there have been other changes.

Now there will be just four pot buildings instead of the original six. But the 384 pots will produce 420,00 tonnes of metal a year instead of 370-390,000.

That increase is possible because the technology is more efficient and more metal can be produced from the same amount of power.

So how much power will the new smelter be using and how much will be sold to BC Hydro?

 

We’ll get to that next week.