Alcoa Clean Up Plan Another Step Toward Modernization
The EPA approved on Friday a $243 million cleanup plan of the Grasse River in Massena, New York for which aluminum manufacturing giant Alcoa Inc. (NYSE:AA) will cover the costs. According to the Wall Street Journal, the plan will include dredging a 7.2 mile stretch of the river to remove PCBs that were introduced between the 1950′s and 1970′s by factories that include Alcoa’s industrial site in the area. The EPA had designated the Massena area a “Superfund” site. In addition to the dredging, 59 acres of contaminated sediment will placed in a secured landfill and covered by an armored cap. An additional 225 acres will be buried under a mixture of sand and topsoil.
Besides the cleanup costs, Alcoa will also go ahead with a short-term $52 million plan to modernize its factory complex in Massena. $10 million of this plan will go toward economic development in the region. Local officials wanted the EPA’s cleanup cost determination to be lower because they feared the modernization plan would be scrapped. The St. Regis Mohawk Tribe wanted a more expensive cleanup plan implemented because of health concerns linked to the river’s contamination.
As a result of the modernization plan, the New York Power Authority (NYPA) will provide power to Alcoa for a lower than normal cost until 2043. However, Alcoa must invest a total of at least $600 million on modernization during this period to receive the electricity price break. According to NASDAQ, electricity costs can account for up to 25% of the manufacturing costs of aluminum. Modernizing the plant will also make the aluminum smelting process cheaper.
Massena, New York mayor Jim Hidy said “This is welcome news to our community and to our region that needed some feel-good news…This couldn’t come at a better time.” However, local news station WWNYTV reports that the Mohawk Tribe believes that the EPA approved plan will keep 93% of the pollution in place. Mayor Hidy thinks the plan is good though. “It’s the fair thing to do — keep people working, keep the industry in Massena — and let’s move forward,” he said. The eventually $600 million renovation plan is expected to keep 900 jobs in the area.
On April 3rd, US Senator Charles Schumer visited the Massena Superfund area and called on the EPA to approve a cleanup cost plan so Alcoa’s $600 million investment in its plant and the area could start. While waiting for Schumer to arrive, 80 year old Massena trustee Herb Deshaies said, “Jobs. Jobs is the name of the game…My father worked there. I worked there, and all my brothers worked there, for a while. Then I ended up working for the telephone company. We’ve got to keep Alcoa here. We’ve got to have it. If not, we’re going down the tubes.”
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