An employee is seen inspecting rolls of finished aluminum in the mill Alcoa Warrick Operations in April 2006. Staff file photo by Daniel R. Patmore
Alcoa Archives On June 10, 1960, the first smelting pot at Alcoa Warrick Operations was tapped and molten aluminum was poured into pig-style ingots. Today, the smelter produces about 1.6 million pounds of molten metal each month, which is cast into ingots that are as long as a school bus and weigh more than 40,000 pounds.
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EVANSVILLE — Alcoa Warrick Operations has agreed to the $670 million sale of its rolling mill business to Kaiser Aluminum Corporation.
Alcoa has operated the rolling mill at its integrated aluminum manufacturing facility east of Newburgh near the Ohio River since 1964, four years after aluminum smelting began at the site.
The company announced the sale agreement on Monday.
Alcoa Warrick Operations spokeswoman Kari Fluegel said the sale is expected to become final on March 31, 2021 if the timeline of regulatory approvals and closing conditions proceeds on schedule. The approximately 1,170 workers in the rolling mill will become Kaiser employees.
Fluegel said there will be no significant impacts on operations at the facility.
Alcoa will continue to operate its 269,000-metric-tons per year smelter and its coal-fired power plant at the site, which together employ approximately 660 people, according to a press release.
It will also enter into a ground lease agreement with Kaiser for property that Alcoa will continue to own at the Warrick site. Once the sale closes, Alcoa will enter into an agreement to supply Kaiser Aluminum.
The rolling mill produces approximately 310,000 metric tons of flat rolled aluminum annually for use in packaging, including food containers, aluminum cans, and bottles.
According to the sale announcement, the deal is part of Alcoa’s strategy to raise between $500 million and $1 billion in cash by selling non-core assets. Earlier this year, Alcoa sold its former waste treatment business in Gum Springs, Arkansas, for $200 million in cash with an additional $50 million that will be paid if certain post-closing conditions are satisfied.
The company also said it expects to lose about $800 million a year in sales and $55 million in after-tax net income once the rolling mill sale goes through.
In addition, Alcoa said it expects to spend about $100 million in transaction costs and to separate the smelter and rolling mill sites through 2023.
In March 2016, Alcoa closed its Warrick smelting operations citing low aluminum prices, but resumed operating three of the five closed smelting pot lines in 2018.
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