Mining Company Noranda Aluminum Files for Bankruptcy Protection

by San Antonio Attorney

Noranda Inc., a mining and metallurgy company originally established in Quebec, is seeking Chapter 11 bankruptcy protection due to falling aluminum prices and other problems that caused idle production at the smelter in Missouri.

Declared as one of North America’s huge manufacturers of aluminum foil, it also refines aluminum and mines the mineral bauxite.

The company made their bankruptcy filing last Monday in St.  Louis, Missouri.  Noranda is hoping to follow a restructure plan throughout the proceedings.  The company, now based in Franklin, Tennessee, previously had more than 1,800 workers that they now need to lay off.

According to court documents, the company has plans to sell their flat rolled products business to potential investors and eventually halt the last pot line at a smelter in New Madrid, Missouri in order to liquidate its expenses.

Noranda has shut down two of its plant lines after a failure of the electrical circuit occurred.  This malady caused layoffs of more than 850 workers on the spot.  This occurrence was predictable as an explosion that involved molten metal at the work site have already damage the cast house five months ago.

In a succession of lower aluminum prices, New Madrid Plant accidents, high cost electricity, failed funding from the Jamaican government and a subsidized contract with a key customer trigger the company to file bankruptcy.  Labor costs such as unfunded pension worth $159 million also triggered this early 2016.

Kip Smith, the company president and chief executive, believed that the bankruptcy process will provide ample time and financial resources as a means of evaluating options to enhance sustenance of major business operations.

Ming and smelting have encountered low aluminum prices due to a lower demand.  Noranda’s rival, Alcoa, closed branches in Indiana and Texas due to high cost smelters.

Leave a Comment

Previous post:

Next post: