TORONTO (miningweekly.com) – US aluminium refiner and products manufacturer Alcoa on Tuesday announced that it had reached an agreement to improve the competitiveness of its three smelters in Quebec, securing about 3 000 jobs.

Under the accord, Hydro-Québec would renew Alcoa’s power supply contracts for the Becancour and Deschambault facilities until 2030 and for the Baie-Comeau plant until 2036.

The agreement enables Alcoa to advance $250-million of planned investments at the smelters over the next five years to further improve their competitiveness. As part of that investment, Alcoa said that it would increase aluminium output, used for automotive manufacturing, and reduce commodity-grade aluminium output at the Baie-Comeau casthouse, to capture demand from automakers as they turn to aluminium for more fuel-efficient vehicles.

According to automotive manufacturers, aluminium body sheet content in North American vehicles was expected to quadruple by 2015, and increase tenfold by 2025, from 2012 levels.

“These actions support our strategy to lower the cost base of our upstream businesses while capturing demand for higher-margin, value-add products. The agreement will help Alcoa achieve its goal of moving down the global aluminium cost curve, and the casthouse optimisation will help meet growing demand for aluminium in the North American auto market,” Alcoa global primary products president Bob Wilt said.

Alcoa added that it had agreed to support the government’s electric transportation strategy by considering the Baie-Comeau facility as a potential source of aluminium for emerging technology applications, including aluminium-air batteries.

Alcoa recently entered into a joint development agreement with clean technology company, Phinergy, to further develop its battery, which can be used in electric vehicles and runs on air and aluminium. Alcoa will also provide financial support and lend technical expertise to government-led programmes focused on light-weighting vehicles with aluminium.

The previously planned modernisation of the Baie-Comeau facility, through which Alcoa would have constructed a new potline to replace the two Söderberg potlines it closed last year, was not included in this agreement and would no longer be pursued.

Alcoa’s four Quebec plants have a yearly capacity of almost one-million metric tons of ingots, castings, billets and aluminium rods. Alcoa supports about 3 000 employees in Quebec and its activities generate more than $1.5-billion in provincial economic impact a year.