May 19 2005
Alcoa announced today that it will invest $45 million to purchase equipment and the rights to mine coal from Vigo Coal Company to power its aluminum smelter in Warrick, Ind. The investment also calls for the addition of a coal preparation facility and material handling infrastructure to enable transport of coal via railcar to the smelter's power plant. The coal is expected to be available for use by Alcoa Warrick Operations by July 2006.
Under the terms of the agreement, Alcoa will purchase the rights to mine 2,500 acres in the reserve at the Friendsville Mine near Mount Carmel, Ill., for 10 years, with the opportunity to expand from there. The mine will be capable of producing approximately 1 million tons of coal a year, approximately 45 percent of the power plant's fuel requirement. Vigo Coal will provide mining services to Alcoa. The mine will contribute approximately $20 million annually to the local Illinois economy.
Alcoa Warrick Operations is an integrated facility housing a 309,000 metric ton per year (mtpy) primary aluminum smelter and rigid packaging operations that produce aluminum sheet for beverage and food can ends, tabs, and other flat-rolled aluminum products. It employs approximately 2,150 people and contributes $1 million a day, to the local Indiana economy.