Noranda announces layoffs in Missouri

Sep 3, 2014

An aluminum plant in New Madrid will lay off between 125 and 200 jobs over the next six months.

Noranda Aluminum CEO Kip Smith said in a news conference Tuesday afternoon that he is disappointed in the Public Service Commission's decision not to lower power rates.

"Like every other smelter, a third of our cost is electricity," Smith said. "Given the increases in our power rate we've ended up in a situation where we have an unaffordable and uncompetitive power rate." Governor Jay Nixon released this statement on Tuesday about the layoffs:

"The announcement today by Noranda to reduce its workforce substantially and put $75 million in capital projects on hold is unfortunate for the region and for our state. The job losses announced today are particularly troubling because the Office of Public Counsel had proposed a workable path forward, supported by consumer advocates, that would have protected ratepayers and avoided this unfortunate outcome."

Congressman Jason Smith also released a statement on Tuesday. He said:

“With over 900 employees, Noranda is a huge part of Southern Missouri's rural economy. The 200 jobs eliminated today were good-paying and came with benefits. Tonight, 200 families will have to decide how they are going to make ends meet. I will continue to work with all parties to see if a solution can be reached and future job losses can be prevented.”

The Missouri Public Service Commission voted unanimously in August in Jefferson City, Missouri to dismiss a utility rate complaint filed by Noranda Aluminum against Ameren Missouri.
According to the commission, the vote was 5-0.

Noranda Aluminum operates a smelting plant in southeast Missouri with nearly 900 workers.

The company wanted the Public Service Commission to order a reduction in its rates and pass the costs along to other Ameren customers.

According to Noranda, Ameren is charging the company too much for electricity. Noranda reportedly wanted roughly a 25 percent cut in rates.

The Franklin, Tennessee-based company says it already has begun the process of eliminating 125 to 200 jobs over the next six months.

"With that being such a large part of our cost, it was necessary for us to take short term actions while we seek an affordable and competitive power rate," Smith said.

Noranda also is suspending a $30 million expansion project in southeast Missouri and is considering whether to build a $45 million aluminum rod mill in a neighboring state.

Smith says Noranda is forced to move to a new plant that is not yet built in a state outside of Missouri.
Smith says he will file a request to the PSC to review the decision. He asked for the support of Gov. Jay Nixon.

Noranda is the state's largest electricity consumer.

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