Century Aluminum CEO says idled Ravenswood, West Virginia plant 'at the top of our focus list'

Century Aluminum Company CEO Michael Bless says a power agreement that would enable the company to restart its idled Ravenswood, West Virginia, plant is “right at the top of our focus list.”

Bless told analysts during an earnings call Wednesday, July 30, discussing Century’s second quarter 2014 earnings that the company is “working hard” to get the plant back in operation, pointing out Century has made continual investments “to hold the plant in a ready state.” He said discussions with Appalachian Power and other key constituencies are ongoing, adding that there has been progress “and (we) continue to believe there is a solution to which we remain absolutely committed.”

“We’ve made some reasonable progress during the last couple months, exploring various structures that would provide a long-term, competitive power rate for the plant and at the same time, also work for the power company and ratepayers,” Bless said. “As I’ve said, the market environment is favorable - this metal is needed in the U.S. We hope to have news to report in the reasonably near future, perhaps before the end of the year.”

The company was granted the ability to have a special electricity rate by the 2012 Legislature, but Century couldn't come to an agreement with Appalachian Power. The Public Service Commission of West Virginia issued a rate ruling Oct. 4 2012, and Century asked for a rate reconsideration hearing that the PSC denied.

A spokesperson for AEP, Appalachian Power’s parent company, could not be reached for comment.

Bless, though, told the analysts APCO “has been part of all these discussions, they’re a partner.”

“We’re convinced they want this plant, this smelter, open as much as we do," Bless said. "The question at the end of the day, assuming success, is what the right formula is. I wouldn’t want to predict it at this point in time.”

Bless said the company has been working toward a Ravenswood restart “in earnest, for four years that I can remember off the top of my head, (maybe) even before that.”

The plant closed in 2009, eliminating 650 jobs and eventually eliminating health insurance coverage for its retirees.

“Assuming we can get to a power structure that offers upside but protects shareholders in the downside, I think it would be a great investment,” Bless said. “There’s going to be restart costs, but it would be reasonably modest in the grand scheme of things.

"We think the plant could be producing quickly and producing a product that’s needed in the marketplace. We’ve got a (company) right next door ... we believe would like a good chunk of it in molten form; that’s Constellium’s plant, of course. So, it’s got all the attributes of something that would be reasonably low risk assuming power, and give us some nice upside.”

Century reported net income of $20.3 million, or $0.21 per common share, for the second quarter on higher aluminum prices and lower power prices in the midwest. Results were negatively impacted by a half-million charge for the finalization of a legal settlement.

Sales for the quarter were $458.3 million, up from the $331.9 million reported in the same three-month period in 2013.

Century had reported a net loss of $29.4 million for the second quarter 2013.

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