Ormet starts selling off machines, raw materials
HANNIBAL – Ormet Corp. plans to auction equipment and raw materials used in the aluminum smelting process at 10 a.m. today, according to records in the U.S. District Bankruptcy Court in Delaware.
Ormet closed the Hannibal aluminum smelter in October amid high utility costs and low global metal prices.
CEO Mike Tanchuk announced the closure of the plant that opened in 1958 after the Public Utilities Commission of Ohio refused to lower Ormet’s electricity costs from $60 to $45.89 per megawatt-hour as the company requested.
Because the company is bankrupt and cannot pay its debts, the court is allowing raw materials to be sold to help pay off the debt. Documents filed Tuesday show Ormet is looking to auction its baked carbon anodes today.
According to Pittsburgh-based aluminum giant Alcoa Inc., anodes are large carbon blocks that act as electrical conductors to allow the aluminum smelting process to take place at a plant such as Ormet’s Hannibal Reduction facility.
Published reports indicate Alcoa is interested in the Ormet anodes, offering to pay $3.4 million for 17,086 metric tons of anodes.
The sale of raw materials used to make aluminum may not end with the anodes, however. Court records also show Ormet has permission to sell alumina – which become aluminum through the smelting process – to Switzerland-based Trafigura for $281 per metric ton. Documents also show that Ormet’s Burnside, La. alumina refinery will be sold to Almatis Inc.
Published reports also show that Libertas Copper of Leetsdale, Pa. offered to pay $7.6 million, or about $3.25 per pound, for 2.47 million pounds of new and used copper rods from Ormet.
Ormet filed for bankruptcy in February before slightly reducing its work force throughout the year to cut electricity costs. Hopes were raised over the summer when Tanchuk announced that Minnesota-based Wayzata Investment Partners wanted to purchase Ormet for $221 million. Ormet even planned to become self-sufficient by developing a system to generate its own electricity from locally drawn Marcellus and Utica shale natural gas.
However, the utilities commission made its ruling in early October, leading Tanchuk to announce that Ormet would suspend all operations and begin shuttering the plant just a few days later.