SOURCE: Century Aluminum Company

December 06, 2005 11:44 ET

Century Aluminum Company Signs Memorandum of Understanding to Extend Kentucky Power Contract

MONTEREY, CA -- (MARKET WIRE) -- December 6, 2005 -- Century Aluminum Company (NASDAQ: CENX) announced today it has signed a memorandum of understanding with Big Rivers Electric Corp. and Kenergy Corp. to replace the current electricity service agreement that provides power to the Hawesville, Kentucky, reduction plant. The proposed new agreement would restructure and extend the existing electricity service contract from 2007 through 2023. Century's Hawesville facility currently purchases all of its power from Kenergy, a local retail electric cooperative, under a power contract that expires at the end of 2010.

Century's objective is to obtain competitively priced electricity that will support the long-term viability of the Hawesville facility in western Kentucky. A final agreement is subject to definitive documents and regulatory approval. The proposed restructuring of the Century electricity service agreement is part of an overall transaction that would return operating control of the Big Rivers generation assets to Big Rivers. Big Rivers and LG&E Energy, LLC have signed a letter of intent to unwind the lease of those assets, which has been in place since 1998. The closing of this transaction is a condition to the restructured Century contract.

"Because of rising energy prices and high labor costs, the primary aluminum industry in the United States is facing serious competitive pressures," said Century chairman Craig A. Davis. "Century Aluminum provides employment to over 750 full-time workers at Hawesville. A power agreement that allows us to continue operations is in the best interest of all parties and the western Kentucky economy. Rising fuel costs continue to be an overriding concern. We believe that an efficient Big Rivers generation system will be capable of delivering electricity to our Hawesville facility at rates that allow us to operate over an extended period of time."

Century presently owns 615,000 metric tonnes per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a 90,000 mtpy plant at Grundartangi, Iceland, that is being expanded to 220,000 mtpy. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. Alcoa Inc. owns the remainder of the plant and is the operating partner. With the completion of the Grundartangi expansion, Century's total capacity will stand at 745,000 mtpy by mid-to-late 2006. Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in Jamaica. Century's corporate offices are located in Monterey, California.

This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future, however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.

Contact Information

  • Contact:
    Century Aluminum Company, Monterey, California
    Michael Dildine
    831-642-9364
    Email Contact