KANSAS CITY, Mo. – One of North America’s biggest makers of aluminum foil is seeking bankruptcy protection to restructure, citing falling aluminum prices and other market challenges that also will force it to idle production at a Missouri smelter.
Noranda Aluminum Holding Corp., which refines aluminum and mines bauxite, made the Chapter 11 filing Monday in St. Louis.
The Franklin, Tennessee-based company with more than 1,800 employees said in court documents that it plans to sell its flat-rolled products business and next month halt the last remaining pot line at a smelter in New Madrid, Missouri.
Noranda last month shut down two of that plant’s lines after an electrical circuit failed there, prompting layoffs of roughly half of the site’s 850 employees. Five months earlier, an explosion involving molten metal at the site extensively damaged the cast house.
Noranda said Monday that declining aluminum prices, incidents at the New Madrid plant, high electricity prices, failed arbitration with the Jamaican government and a below-market contract with a key customer prompted the bankruptcy filing. Noranda also cited labour costs, including $159 million in unfunded pension liabilities as of the beginning of this year.
“We believe this court-supervised process will provide us with time and financial flexibility to evaluate options to enhance the sustainability of our major business operations,” said Kip Smith, Noranda’s president and chief executive.
The industry’s mining and smelting side has faced weak aluminum prices due to a global glut. Alcoa Inc., a Noranda rival, also has curtailed high-cost smelters, announcing last month plans to close one in Indiana and idle another in Texas.