Alcoa announced it will temporarily idle production at its two aluminum smelters in Fusina and Portovesme, Italy. The curtailment is a result of uncertainty in obtaining future power supply for the smelters at competitive rates and the financial impact of today’s European Commission decision that Italy’s extension of the existing electricity tariff after 2005 did not comply with European Union state aid rules and that a portion of the benefit received by Alcoa must be refunded. Alcoa is appealing the decision. The curtailments in Italy will bring Alcoa’s total global smelting system curtailments to approximately 24 percent. The company will continue to take steps to optimize its global smelting system as market conditions warrant. The Company expects to take a fourth quarter 2009 charge of between $300M and $500M, pre-tax, including temporary curtailment and recovery actions. Most, if not all, of the charge is not expected to impact fourth quarter cash flow. :theflyonthewall.com
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