MTPR

Rising Energy Prices, Global Competition Led To Aluminum Smelter Closure

Mar 4, 2015

To many Columbia Falls residents the full closure of the local aluminum smelter was more a matter of when than if.

That question was answered with certainty this week when Columbia Falls Aluminum Company announced that it's permanently shuttering the plant.

Local real estate agent Bill Dakin say this development was a long time coming.

"This announcement, finally, an honest announcement that this plant will never refine aluminum again, is kind of a new day here."

The Columbia Falls Aluminum Company, commonly referred to as CFAC, stopped production in 2009 during the height of the recession. A small work crew has maintained the plant on the hopes the smelter pots, which require enormous amounts of electricity, would once again fire up.

That day will never come.

State Senator Dee Brown says Tuesday’s announcement brings closure for former CFAC workers who've patiently waited for solid answers about the plant's future.

"[Workers] have had to do other things in the community, looking forward to that carrot on the end of the stick. Finally they've caught up to the carrot. Hopefully, many of them, the union workers, will be employed in whatever Glencore is going to do as far as demolition and that type of thing."

Glencore is a Swiss commodities firm that bought CFAC in 1999.

The smelter was started by the powerful Anaconda Company in 1955. It was a local  economic powerhouse for decades. At least two other companies purchased and subsequently sold CFAC prior to Glencore’s ownership.

Columbia Falls Realtor Bill Dakin says to understand why the plant is closing, it's important to know why it opened in the first place. It boils down to post-war homeland security. Aluminum is an important, lightweight metal, but North America has precious few aluminum ore reserves. It has to be mined and shipped-in from overseas.

"It was all about cheap power. It was all about the Bonneville Power network. When we started to see in the 80's these giant hydro facilities in China and Bolivia, the handwriting was on the wall," Dakin said.

That handwriting became more clear in 2006. Prior to then, business was booming in the American northwest; 10 aluminum plants, including CFAC, and one paper mill purchased power directly from Bonneville Power.

According to CFAC spokesman Haley Beaudry, that changed in 2006.

"The price of power was just too high," Beaudry said. "It was simply that there was more growth in the northwest than there was ability to buy power for all of the industry, commercial and homes for the people running those industrial and commercial facilities."

The recession hit a couple of years later and that was the beginning of the smelter's end.

"Aluminum prices around the world had joined other commodities and the general economy and taken a nosedive. The price of aluminum was down so far we couldn't support a restart of the plant," according to Beaudry.

The CFAC plant itself has an 800-acre footprint on Glencore's roughly 2,500 acre property. An Environmental Protection Agency study found cyanide, arsenic, lead and fluoride in groundwater on the site. EPA and Montana's Department of Environmental Quality are studying cleanup options. Senator Jon Tester and Governor Steve Bullock are pushing for a Superfund listing.

CFAC's Haley Beaudry says that would be a bad idea.

"I believe there are 18 Superfund sites in the state of Montana. Some of them have been Superfund sites since the inception of Superfund 31 years ago. No site had been deemed complete."

EPA says there 16 Superfund sites in Montana that are listed on the National Priorities List and most of them are associated with past mining activities that affect large geographic areas and watersheds. The agency says by their very nature, the site often require long-term attention. It adds a monumental amount of cleanup work has been achieved at these sites, some of which are among the largest contaminated sites in the country

CFAC’s Beaudry also says  a Superfund listing makes it tough, if not impossible to get financing for development projects and stigmatizes neighboring properties.

Republican state senator Dee Brown of Hungry Horse thinks Glencore has valid concerns.

"I hope they'll work with the DEQ and take care of the pockets that might be out there and do it on a fast track so that we have some new jobs in our community. That's always been our goal," Brown said.

Local realtor Bill Dakin, meanwhile believes CFAC's ample access to roads, Bonneville Power lines and the BNSF railroad makes it an extremely appealing  property for some enterprising buyer, or buyers.

Dakin says, "the site is absolutely gorgeous (with) the plain looking out over the river, the base of the mountain, convenient to the recreational wonderland of northwest Montana. It's gonna be a trophy property for its future purposes."

But Dakin's playing the long game on his prediction. He bets it'll take 5, 10, maybe 15 years for cleanup of the Columbia Falls Aluminum Company property. That's a long time, but he thinks it'll be worth the wait.