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Intalco gets state funding that could keep Ferndale smelter open

The state legislature’s budget includes $3 million for the Alcoa Intalco smelter near Ferndale, shown Sept. 19, 2013, from the air. The money could help keep the smelter open passed a planned idling date.
The state legislature’s budget includes $3 million for the Alcoa Intalco smelter near Ferndale, shown Sept. 19, 2013, from the air. The money could help keep the smelter open passed a planned idling date. The Bellingham Herald

The latest state budget could end up playing a role in keeping Intalco’s aluminum smelter near Ferndale operating beyond June 30.

Union workers were informed Tuesday, March 29, that $3 million for the Intalco workforce training budget made it into the final Washington state budget plan, which is expected to be approved by legislators and signed by the governor.

The funding is used to help pay for training of workers, including maintenance of the facility as well as skill upgrades, said Glenn Farmer, business representative for the International Association of Machinists Local 2379 District 160.

This is a crucial piece for keeping the smelter going and now we’re waiting for Alcoa to bring us across the finish line.

Glenn Farmer, machinists union

While the state constitution doesn’t allow direct grants to keep companies in the state, it can offer incentive programs that provide some form of public benefit.

Farmer said he wasn’t sure right up until he was told Monday evening whether this budget would be fully funded. He was appreciative of fellow union workers and the community for the efforts in contacting legislators.

The news left him optimistic that Alcoa will be able to find a way to keep the smelter operating past June.

“This is a crucial piece for keeping the smelter going and now we’re waiting for Alcoa to bring us across the finish line,” Farmer said.

Last November, Alcoa announced that it was idling the smelter because of low global aluminum prices and an oversupply of the metal. In January, Alcoa extended the operation of the smelter until the end of June.

If the smelter is idled at the end of June, it would mean the loss of around 465 jobs. The company plans to keep the casthouse in operation after the curtailment at the end of June, employing about 100 people.

Alcoa spokesman Josh Wilund said in an email that they are pleased the legislature has included funding in the budget but didn’t elaborate beyond the written statement.

This comes at a time when some in the industry are becoming more bullish about aluminum prices rebounding in the global market. Prices have been fluctuating in recent weeks, according to the London Metal Exchange, rising above $1,600 a metric ton earlier this month before falling to $1,469 on Tuesday, March 29. According to a Bloomberg article, aluminum prices in China hit a five-month high last week.

The mood among workers at Intalco prior to the latest funding announcement has been somber, with many just quietly awaiting news about the future of the smelter, Farmer said. The smelter is hiring temporary workers to replace those who have left for either early retirement or other jobs, but that is going slow because of fewer applicants than expected. Farmer said he understands that, given the current uncertainty of the smelter, but he thinks the funding for training may convince some that it is a better bet that the smelter will keep running.

Dave Gallagher: 360-715-2269, @BhamHeraldBiz

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