Gramercy Aluminum Bets on Alumina Market Improving with Plans for Major Capital Upgrades of Louisiana Operations

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Researched by Industrial Info Resources (Sugar Land, Texas). The current demand and pricing for alumina has driven some producers to scale back production or even shutter plants entirely in recent months. Gramercy Aluminum, LLC (Gramercy, Louisiana) is counting on this being a short-term obstacle and continues to plan for big capital improvements for both production and utility areas of its estimated 1.2 million metric ton per year alumina plant located in Gramercy. Current plans include the potential conversion of several batch processes to a continuous flow operation plus the installation of a new fluid bed calciner, increasing the overall production capacity of the plant. These upgrades and additions could cost in excess of $150 million to complete, if approved.

Since 1999, Industrial Info has been tracking plans for a major cogeneration unit addition at the site that is planned to produce an estimated 250 megawatts and process steam for internal use plus power for the merchant market. It appears that this project is making progress with the expectations of selecting technology and a firm to build, own and operate the $300 million project by the summer of next year.

Other investments in this segment of the Chemical Processing Industry (CPI) are significantly smaller and aimed at niche markets. Porocel Corporation (Houston, Texas) continues to evaluate the purchase of an idle rotary kiln located immediately adjacent to its existing Little Rock, Arkansas plant. The purchase of this asset would allow for increased production of alumina for chemical catalyst. Criterion Catalyst & Technologies, LP (Houston, Texas) will begin construction next month for a nearly $18 million retrofit of its alumina unit located in Port Allen, Louisiana. Read related Industry Alert titled Criterion Catalyst Scopes Major Unit Addition for Gulf Coast Catalyst Plant to Support Refining Markets.

Reinforcing that this market segment isn’t entirely operating in the black, Ormet Primary Aluminum Corporation (Canonsburg, Pennsylvania) recently shuttered its alumina plant located in Burnside, Louisiana. This plant has been previously shuttered and restarted after an extended period offline back in November of 2003. Production of the 600,000-ton per year plant was ceased several weeks ago and a complete shutdown of the plant is scheduled for December 18, 2006. The plant will remain idle and will restart promptly, once alumina pricing increases substantially.

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