2023-11-18 00:30:32
Inflation is hitting everywhere, including on the construction site of the future billet factory at the Alma aluminum smelter. Significant cost overruns force Rio Tinto to halt construction of the $240 million project.
“It doesn’t change anything regarding the project, but it will delay entry into service by a few months,” explained Rio Tinto spokesperson Malika Cherry.
The $240 million project was announced with great fanfare in 2022, following a wait of several years. The work began a little over a year ago, and will not resume until next spring. Cost overruns are expected to be significant “due to the design and engineering of the current project,” Ms. Cherry said.
Rio Tinto is now looking for ways to limit unforeseen events. The concreting to allow the continuation of the work during the winter was abandoned, considered too expensive.
The 60-worker site will be gradually reduced over the coming weeks. Full recovery is planned for next spring.
“In the coming weeks, we will work with entrepreneurs and unions to identify ways to better control costs,” assured Malika Cherry.
Rio Tinto did not want to specify the amount or percentage of the cost overrun, repeating that the project was not changing.
“We knew that Rio Tinto was looking for ways to save money due to the explosion in costs,” commented the vice-president of the Alma Aluminum Workers’ Union, Jean-François St-Pierre.
The future factory will produce 200,000 metric tons of billets, will create around forty new jobs and is considered an important milestone in the expansion of the Alma aluminum smelter.
“You know that in 2019, Rio Tinto put it on ice,” recalled Jean-François St-Pierre. This is why we have a certain disappointment, even if we are confident that the project will come to fruition.”
“We are asking the government and elected officials to ensure that Rio Tinto respects its commitments,” he added.
The company had informed the mayor of Alma Sylvie Beaumont of its decision.
“For us, it is certain that there will be monitoring so that the construction site restarts in the spring,” she said.
Entry into production is still planned for 2025.
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