Paul Henning followed through on his promise to give city council periodic updates in a wide ranging July 13 presentation.

The vice-president of BC operations and Strategic Projects Western Canada went through historical figures showing production and also touched on energy production and consumption.

To begin, he said the smelter is right on track to achieve the goal of $40 million in cost savings this year.

But in providing details, he did reveal the smelter had hit hard times this year that even power sales couldn’t balance.

“Two months this year we didn’t make any money,” said Henning. “That’s not just from metal, that’s from combined business of power and metal.”

Currently the plant is out 60 pots, a number Henning had given at council during an earlier presentation, but he emphasized that number isn’t as large as it may appear to people not familiar with the smelter.

“When I was here in February, I realize that 60 pots sounds like a big number,” he said. “But what it is is about 10 to 15 per cent of what we already have.”

The forecast shows that there will be 710 pots running this year. That’s down from 768 last year, and 764 the year before.

“We’re not stopping pots, but we’re not restarting pots that fail,” he explained, noting the reason for that is the price of metal.

While the number of operational pots is down at the smelter, production of those that are running is being maximized.

In terms of kilograms per pot per day, he said they are currently running at 897. That’s better than the previous four years including last year’s high of 881.

Henning pointed out that pots do fail regularly as part of their natural life cycle and typically they repair 140 a year.

The failed pots are still being replaced, however they are not being turned back on.

He said putting them back in the line is good for safety and it also provides better flexibility to restart them in case of a sudden upturn.

Operationally he said it would be best to just have entire lines down (closing 7 and 8 would be the choice) but the problem lies in re-opening them.

It is easy to restart individual pots to allow a controlled restart across the entire site.

Closing down the two lines would, however, mean he can optimize the organization and wouldn’t have to maintain those buildings.

If conditions do end up changing, he may shut down lines 7 and 8 while balancing the energy by restarting the individual pots in lines 1 through 5.

While the price of aluminum has improved, Henning said it just hasn’t caught up with the cost of producing aluminum.

But the plant is in a fairly good position as it stands which he attributes partly to energy but also the geographical position which has allowed it to feed the Asian-Pacific market such as Korea and Japan.

Economically things have changed for operations, notably the fact that purchase orders are on a month-to-month basis whereas it is normally on a 12-month contract or more.

The company has addressed concerns on overtime and Henning said they’ve successfully reduced the overtime percentage to just 10 per cent, down from the 16 to 18 per cent it had been.

“During our process we have not laid anybody off,” he said. “We have let some contractors go, some of those contractors are very close to us and had contracts with us for many, many years.”

As for power, he showed a graph of the amount of energy that goes towards the smelter and the surplus power that gets sold.

The power that the smelter takes remains reasonably consistent year-on-year while the amount that they sell varies higher and lower.

The average long-term Kemano capacity that the smelter works on is 793 megawatts (MW), but power use fluctuates with such things as maintenance or if they’re doing a rebuild.

He also pointed out that a modernized plant would require more energy, 700MW against the current 550MW, meaning there clearly would not be as much energy left over to sell.

Responding to previous discussion with council over power sales, Henning said RTA became intervenors in the BC Transmission Corporation’s utilities commission process because the smelter is directly connected to the transmission line and they need to keep informed to follow regulations.

And, changes on the grid affects them. The decision to electrify Highway 37 North would alter energy infrastructure, as would development down the west side of the Douglas Channel.

Henning noted the energy consumption of Kitimat’s other industries and the townsite equals about 80MW.

There was not much to report on the subject of the modernization project, except that it is alive and well, just moving at a slow pace.

Engineering work continues and there is a little bit of work happening on site, but Henning did emphasize it was a little.

He said that is so work this year won’t have to be repeated again next year.