Punctuating the importance of its power-rate negotiations with Santee Cooper, aluminum giant Alcoa is cutting 12 percent of its global capacity by shuttering a plant in Tennessee, curtailing operations in a Texas site and saying other cuts are still to come.
Whether or how the smelter near Goose Creek will be affected remains to be seen.
"We don't know when or where it will be," local Alcoa plant manager Mike Rousseau said Friday.
The two affected plants represent about 58 percent of the announced capacity cuts. With the rest of the reductions yet to be made, the future of Alcoa's Berkeley County smelter remains in limbo amid the fragile power-contract talks.
The 640-employee Mount Holly smelter has a capacity of 235,000 metric tons, enough for the company to meet its 12 percent cutback target.
Alcoa owns just over half the plant. California-based Century Aluminum owns the rest.
Alcoa has said it is grappling with the slipping price of aluminum and is making the cuts to remain competitive. The price of the metal this week was about $2,003 per ton, or about $100 less than a month ago.
Alcoa corporate spokesman Mike Belwood said the additional capacity cuts will be announced "soon." He declined to elaborate.
"We are not releasing any information, the factors we are using, the timing or the location until we have our analysis complete," Belwood said.
Rousseau said the production cuts underscore the importance of the negotiations with state-owned Santee Cooper and the need to resolve the issue as soon as possible.
"We are clearly focused and have a sense of urgency on the power situation and getting that fixed so we can be competitive on the world stage," Rousseau said. "We should be further along than we are now. We need to get this thing moving quickly."
Alcoa is Santee Cooper's largest customer, consuming about 10 percent of the Moncks Corner-based utility's power production.
Its current contract with Santee Cooper expires in 2015, but a provision in the agreement states that Alcoa must notify the utility by June if it intends to terminate the deal.
The two parties have been in negotiations for several months but have yet to come to an agreement.
Alcoa said it is paying above the national average among smelters for electricity and wants a lower rate to remain competitive. The company has said it could close after 30 years if it does not get a better deal.
Santee Cooper has said it's not a simple matter. The utility said it is grappling with numerous business issues, such as increased coal and transportation costs; the cost of complying with impending environmental regulations; and fairness to other industrial customers.
Santee Cooper had little to say Friday other than that talks continue.
"Santee Cooper continues to work diligently toward a successful negotiation with Alcoa," utility spokeswoman Laura Varn said. "It remains a top priority for us."