Chicago group to buy Longview smelter
John Stucke - Staff writer
Aluminum giant Alcoa Inc. will sell its Longview, Wash., smelter to a Chicago investment group.
Terms were kept secret and the deal is subject to regulatory review.
A spokesman for McCook Metals LLC, one of the principals in smelter buyer Michigan Avenue Partners, said approval of the purchase is expected before the end of March.
Other units of the partnership include Scottsboro Aluminum, Great Lakes Metals and Great Lakes Processing.
The sale solves an antitrust concern about Alcoa's purchase of Reynolds Metals Co. earlier this year.
"McCook had been buying half of its aluminum from the Longview facility for a long time," said spokesman Paul Frank. "This allows them to source more of their own material."
McCook is a specialty metals company headquartered southwest of Chicago in the town of McCook, Ill. It manufacturers such things as aluminum-lithium alloy for use in aerospace and military aircraft. For example, the aluminum made in Longview is an important ingredient in the aluminum-lithium McCook sells to NASA for the space shuttle. The special metal is used as the outer skin of the main fuel tank, the bright orange vessel used during launches and discarded as the shuttle is powered into space.
By using the strong, lightweight alloy, engineers have been able to shave more than three tons from the shuttle's fuel tank, Frank said. Also, aluminum-lithium can be found on F-16 fighter jets and the Hubbell telescope.
McCook bought the smelter as part of a legal settlement. When Alcoa merged with Reynolds, it had to sell at least a 25 percent interest in the Longview smelter to satisfy conditions set by the European Union.
Instead of piecemeal ownership, Alcoa sought an outright sale of the smelter. McCook was a ready buyer.
It will be McCook's only smelter. Frank said the company intends to run it at full capacity, even as other aluminum smelters in the Northwest curtail production because of soaring electricity prices and regional power shortage worries.
"The leadership is keenly aware of the power needs of the Pacific Northwest, and I can tell you that factored into the sale considerations," Frank said. "I know they plan on operating it. I couldn't tell you in terms of capacity, though."
An Alcoa representative said the Longview smelter produces about 204,000 metric tons of aluminum each year. Adding it to McCook's asset base will push the company's annual sales to more than $1 billion.