Spokane group eyes aluminum venture

Investors with former ties to Kaiser studying possible Canadian smelter project

John Stucke - Staff writer

Spokane _ A Spokane group specializing in aluminum company development wants to build a new, $1.4 billion smelter in British Columbia.

KTD LLC President David M. Krakoff said a feasibility study will be completed next June -- the first step in what he believes will be a project creating 650 new jobs in Port Alberni, a town of 25,000 located about 100 miles north of Victoria.

"We're doing studies to confirm, but as professionals, we believe in this," Krakoff said Wednesday. "It's a great port, and they have a tremendous work force."

Just as important, he said, is the prospect of affordable electricity, a key ingredient for any aluminum project, especially a smelter.

Smelters in Northwest states are facing huge issues of rising power costs and availability.

Through the Jobs for Power Initiative announced by British Columbia several years ago, smelters, along with mining and forestry companies, can secure attractive power rates by creating new jobs.

Add what Krakoff thinks is a bright outlook for aluminum markets and the Vancouver Island project may have potential.

At a news conference in Port Alberni Wednesday, a consortium of private and government development groups announced hiring of KTD to explore the possibility of building a smelter capable of producing 360,000 tons of the metal each year.

Kaiser's Mead and Tacoma smelters have a combined annual capacity of 273,000 tons. Because of escalating power costs, the Tacoma smelter (capacity 73,000 tons) is shut down, and Mead is currently producing only at a 138,000-ton rate.

Janet Schlackl, with the Alberni-Clayoquot Economic Development Commission, said the slumping timber industry has dampened the local economy. Mills have closed and the town needs different kinds of employers.

At the press conference, British Columbia Premier Ujjal Dosanjh lent support to the idea of towns pursuing economic development goals, but not this particular project.

So far, KTD has been hired to usher the effort through the first study. The Canadian government has pledged $52,000 (Canadian) and the British Columbia government has contributed $97,500 more.

For Krakoff, the Port Alberni deal is KTD's first big project. Along with vice president Alan R. Phillips, the company, which began business in July, is comprised of aluminum industry veterans, many of whom were once with Kaiser Aluminum Corp.

As Kaiser restructured, executives such as Krakoff and Phillips decided to start their own firm, originally called KAI Technology and Development Inc.

Kaiser spokeswoman Susan Ashe added that the project is not financially linked to Kaiser.

In fact, she said, Kaiser briefly looked at the possibility of expansion into British Columbia after the Jobs for Power Initiative was announced, but decided against it.

Denis White, president of the Port Alberni Port Authority, said the community needs the sort of economic jolt a new aluminum smelter can provide. The city exports forest products worldwide. It has a high-gloss paper and newsprint mill and four sawmills.

But in recent years it has lost a plywood plant and a pulp mill.

"This is a project we've worked on to reclaim jobs," White said. "There's a real willingness in the community for this."

Krakoff agreed: "They embraced this idea like many cities do a new sports team."