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With a new power deal, Century Aluminum invests in SC expansion

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Century Aluminum plans to restart half of the second pot line at its Mount Holly smelter in Goose Creek after reaching a deal with electricity provider Santee Cooper. File/Lauren Petracca/Staff

GOOSE CREEK — Century Aluminum is starting to replace equipment at its Mount Holly site as part of a deal with electricity provider Santee Cooper that will let the smelter increase capacity and hire more workers over the coming years.

Craig Conti, Century's chief financial officer, told analysts during a conference call last week that the company will spend about $5 million during the first quarter of this year to restart part of a second pot line at the smelter. All told, the manufacturer plans to invest $50 million this year to increase Mount Holly's aluminum-making annual output capacity to 140,000 tons. The company expects capacity will reach 170,000 tons per year — or 75 percent of full production — by the time the expansion is finished.

Most of the early work will involve replacing some of the pot line's electrolytic cells where aluminum is formed. Those components fail over time and Century had not been replacing them because of the uncertainty over a new deal with Santee Cooper.

"We purposely have not rebuilt cells as they have normally failed over the last four plus years," CEO Mike Bless told analysts. "We need to fully rebuild all the cells in the pot line that's been operating plus half of the other line to get to 1½ pot lines."

Bless said the company is "moving forward aggressively on the rebuild process" and plans to hire 70 more people as part of the capacity expansion. The Mount Holly smelter, located off U.S. Highway 52 near Goose Creek, currently employs about 300 workers.

The increased capacity is the result of a new contract with Santee Cooper that will let Century purchase all of the power needed for Mount Holly — about 300 megawatts — at a fixed price through at least 2023. The new contract is expected to take effect in April.

Santee Cooper has said it is developing an "experimental" rate for the plant that would cover costs but not shift any of Mount Holly's expense to other customers.

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Power costs have been contentious in past years, with Century threatening to shut down the Berkeley County site if a better price could not be negotiated. In 2015, Century blamed high electricity prices for a 50 percent reduction in capacity at the smelter, causing 300 job losses.

Bless, who has been critical of Santee Cooper in the past, praised the Moncks Corner-based power provider last week.

"Our colleagues at Santee Cooper were really creative in helping us mutually reach this point, and we're quite appreciative of their substantial commitment of time and resources," he said, adding the new three-year deal gives both sides plenty of time to work toward a more lasting solution.

He also thanked Mount Holly's employees for maintaining their focus on safety and production in recent years even as the plant's future has been uncertain.

"The real credit for getting us to this point goes to our people at Mount Holly in managing the plant consistently through an extraordinarily difficult period," Bless said. "Obviously, they had the issues caused by the pandemic. And those were exacerbated by the uncertainty over whether we could find a sensible power contract to run the plant post December 2020. We're very grateful for their commitment and we're now excited to give them the opportunity to rebuild and expand the plant."

Chicago-based Century is the largest remaining primary aluminum producer in the U.S., with the Mount Holly smelter and two more in Kentucky. The U.S. once was one of the world's largest producers with 22 aluminum smelters. The number of operating plants has dwindled from 14 in 2011 to six today.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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