Aluminum industry hopeful Quebec will cut energy rates for smelters
Quebec government has indicated aluminum sector will be key part of economic growth plans
MONTREAL—The head of the Aluminum Association of Canada says producers are in an expansion mood after the new Quebec government indicated the sector will be a key part of economic growth plans in the province during the next decade.
Jean Simard said at an industry conference that Jacques Daoust, minister of economy, innovation and exports, has said he is developing a policy that will help the industry, especially on the issue of energy costs.
Simard said producers need to see rates fall about 40 per cent to a globally competitive level of about 2.7 cents per kWh from the current commercial rate of 4.8 cents.
He said 90 per cent of plant closures in the world during the past decade have happened in the highest cost facilities, while investments have progressively waned because they are no longer feasible.
In meetings this week, Simard said the minister said the province will use energy and aluminum as tools for economic development for the next five to 10 years by working with industry players.
Simard said that commitment makes him optimistic that the rate will be lowered because of the “very clear signal that was reiterated by the government that it wants to support development of aluminum.”
Large investments won’t happen overnight because the aluminum industry faces continued challenges, including a low global price, he said in an interview.
But he said a commitment for lower energy prices could lead to the start of engineering contracts if operators “start seeing a light at the end of the tunnel.”
“What I hear is we’re talking about two years down the road maybe that things are expected to start picking up,” Simard said.