Two potential buyers eye purchasing Alcoa smelter

Over a year after the Alcoa Corporation laid off 700 workers at its Intalco Works aluminum smelter, two potential buyers are reportedly eyeing the Ferndale plant.

Don Goldberg, director of economic development for the Port of Bellingham, informed port commissioners during their October 14 meeting that discussions were underway for two different uses of the property. Goldberg did not name the companies, but said they were also in conversation with Alcoa.

The first company is working with Washington state and Alcoa in an attempt to modernize the smelter and reopen it for production.

“It’s a very complex process to know whether the facility can be opened and whether Alcoa will do a transaction,” Goldberg said during the meeting, adding Alcoa recently sold its property outside of the plant to AltaGas, the new owners of Petrogas Energy Corporation.

“I’m thrilled by the idea that someone may come in there and modernize that plant,” said Ken Bell, Port of Bellingham commission president. “One of the problems with it was it never scaled to the size that would have made it economically viable during the days it operated. It needs that vision in order for it to be successful.”

Pittsburgh-based Alcoa announced in April 2020 that it would stop production at its Ferndale smelter by the end of July 2020 after years of economic instability.

The second option is from a partnership between U.S. and Lower Mainland B.C. companies that want to create the most environmentally friendly steel mill in the world at the now-idled smelter. Steel mills in the U.S. mostly use fossil fuels and ship their scrap to Asia to be made with coal plants, before being shipped back to the U.S., Goldberg explained. Instead, this company would make steel by using scrap in the U.S. and using a modern electric furnace and green hydrogen power.

The steel mill would come in three phases: Phase 1 would have a micro steel mill with about 100 six-figure jobs; phase 2 would be a $1 billion investment that would expand the plant to create 600-700 jobs; and phase 3 would be a $3 billion investment to create over 1,000 jobs, similar to a project the potential buyers are building on the East Coast. Phase one would mostly make rebar steel, while phase two would add more steel products and phase three would add aluminum.

“I’m opening up about the inside conversations that have been done but we’re light-years away from an actual translation or something coming to the commission,” Goldberg said.