Rio Tinto Alcan is planning to make a multi-million dollar investment in construction at a smelter in Kitimat, B.C. in 2011.“We are going to see construction and project activity substantially increase in 2011 as a result of these new funds,” said Bryan Tucker, spokesperson for Rio Tinto Alcan.
Rio Tinto Alcan is planning to make a multi-million dollar investment in construction at a smelter in Kitimat, B.C. in 2011.
“We are going to see construction and project activity substantially increase in 2011 as a result of these new funds,” said Bryan Tucker, spokesperson for Rio Tinto Alcan.
“We are planning to build a 500-person camp to house temporary workers for the Kitimat modernization project, and we will also double the size of our EPCM (Bechtel) workforce and increase the size of the Rio Tinto Alcan project workforce.”
Rio Tinto Alcan recently announced that it is investing US$300 million dollars in construction preparations at the Kitimat smelter to get ready for the US$2.5 billion dollar modernization of that plant.
Tucker said this investment is almost equal to what has been spent since the beginning of the project and it is three times what was spent last year.
A lot of this work is still in the planning stages, but Tucker said there will be many opportunities created for local residents. “This announcement is welcome news for the trades,” said Mark Olsen, business manager with the Construction and Specialized Workers Union.
“We appreciate that during poor economic times, Rio Tinto has continued with the construction of this project, albeit at a slower pace than initially planned.”
This phase of construction involves demolishing an existing building and clearing the area for a new plant, building a new reduction services building, clearing the old pot lines for a new pot line area, relocating buildings on the site and infrastructure such as roads.
Olsen said this phase will also include the construction of a work camp with 400 rooms.
The aluminum smelter modernization is expected to employ about 1,500 construction workers at its peak.
During the recent global financial crisis, Rio Tinto Alcan reviewed its capital expenditures and decided to move forward with the project, but investment was slowed.
The challenging economic times provided Rio Tinto Alcan with an opportunity to reduce capital costs.
“The modernization of our Kitimat smelter is truly a transformational project, in line with our strategic objective to grow via long-life, large-scale, low-cost assets,” said Jacynthe Côté, chief executive, Rio Tinto Alcan.
“Once completed, Kitimat will be one of the lowest-cost smelters in the world.”
The final schedule for completion and commissioning still requires Rio Tinto Board approval for the complete project, which Tucker said should be obtained in 2011.
The modernized Kitimat smelter will be powered exclusively by hydroelectricity and use Rio Tinto Alcan’s proprietary AP technology to reduce its emissions intensity by more than 50 per cent per year.
The project will increase the smelter’s current production capacity by more than 48 per cent to about 420,000 tonnes per year. Rio Tinto Alcan has awarded Bechtel a $200 million contract to provide engineering, procurement, and construction management for the modernization project.
Members of the Kitimat Modernization Employer Association, which was formed by Bechtel Canada Co., contractors and a coalition of 16 building trades, signed a deal on Aug. 28 to supply qualified building trades workers to the project.
The main aim of the agreement is to supply qualified building trades workers to the project, by making a commitment to hire local workers, including First Nations groups.
The non-concessionary agreement is based on the standard no-strike, no-lockout condition for projects. More importantly the agreement integrates the standard industry package of wages and benefits for all 16 unions.
An agreement between the Construction Labour Relations Association of B.C. and the British Columbia Building Trades Council Unions for substance abuse testing and treatment will be adopted for the first time on this project.
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