Alcoa, unions agree 95 mln euro plan for Italy units

* Agreement on temporary curb to Fusina output

* Portovesme to get 60 mln euros, Fusina gets 35 mln euros

MILAN, May 18 (BestGrowthStock) – U.S. aluminium producer Alcoa Inc
(AA.N: ) and Italian trade unions have struck a 95 million euro
($118 million) investment deal for Alcoa’s two Italian plants —
a sign of Alcoa’s will to keep these units open, unions said.

Under an agreement reached on Monday and seen by Reuters,
Alcoa and powerful metals industry unions also agreed to a
temporary halt of the Fusina aluminium smelter near Venice.

Last November, Alcoa said it would temporarily idle its
194,000-tonne-per-year smelters at Portovesme and Fusina after
the European Commission ordered it to pay back most of the state
aid it had received in Italy since 2006. Alcoa has complained
about high power prices in Italy.

“The company confirms its will to remain in Italy with two
production sites,” said the agreement signed by top managers of
Alcoa’s Italian unit and senior representatives of metal
workers’ unions.

Under the 2010-2012 investment plan, Alcoa’s Portovesme
plant on the island of Sardinia would get 60 million euros
($74.50 million) for upgrade and reconstruction of its units to
boost its competitiveness. The plan also foresees cost cuts.

Alcoa would also invest 34.6 million euros in its Fusina
plant, where output of primary aluminium would be temporary
suspended until supply of electricity improved.

Alcoa’s plan for the Fusina smelter, which employs about 400
people, does not foresee layoffs since workers would either be
assigned to smelter maintenance, or transferred to the
associated rolling mill, while others were expected to take
voluntary early retirement.

In March, Italy’s parliament approved a power decree
offering favourable conditions to some industrial consumers to
convince Alcoa to keep its Italian plants working.

Alcoa’s spokesman said last week there were signs the EU
Commission’s evaluation of the Italian power decree was positive
even though Alcoa was still waiting for official word.

EU approval is essential for the economic sustainability of
the Portovesme smelter, as well as for achieving a competitive
energy price for three years, which are required conditions to
keep the plant operational, Alcoa says.
($1=.8054 Euro)

(Reporting by Svetlana Kovalyova; Editing by Amanda Cooper)

Alcoa, unions agree 95 mln euro plan for Italy units