Rio Tinto Alcan Extends Construction Period for $3.3 Billion Kitimat Smelter Modernization

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Researched by Industrial Info Resources (Sugar Land, Texas)--Rio Tinto Alcan, a subsidiary of Rio Tinto plc (NYSE:RIO) (London, England), is conducting the structural erection of buildings that are part of the construction of an aluminum smelter modernization and expansion project at the company's Kitimat Aluminum Smelter in British Columbia. The project involves upgrading the smelter's process technology to Pechiney AP-40 Reduction Cell Technology, as well as expanding capacity from 282,000 tons per year up to 420,000 tons per year. Bechtel Canada is conducting engineering, procurement and construction management for the project.

Rio Tinto Group recently announced job cuts and delays on organic growth project approvals in the short term due to slowing worldwide demand, especially from China. But the company remains on pace to spend $13.7 billion on capital expenditures in 2012.

The Kitimat modernization, which was approved in 2011, is moving ahead as planned but at a slower pace. It is expected that Rio Tinto will spend $1 billion on the project in 2013 while the construction schedule is lengthened. This likely will delay completion of the project by several months. The project was originally scheduled for completion during the first quarter of 2014.

Early this year, it was reported by the Vancouver Sun that the project was experiencing a skilled labor shortage. At peak construction in 2013, the three-year union construction project will require 2,500 workers.

The project also involves the construction of a new 700-megawatt electrical substation.

Industrial Info first reported on the Kitimat Smelter Modernization project when it was in economic evaluation in early 1998.

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