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COLUMBIA ALUMINUM ANNOUNCES REDUCTION IN PRIMARY ALUMINUM PRODUCTION

 VANCOUVER, Wash., Nov. 23 /PRNewswire/ -- Columbia Aluminum Corp. announced today that it would reduce its production of primary aluminum by 11,000 tons annually by Dec. 1. The company's Goldendale smelter will then be operating at 75 percent of its normal capacity. In conjunction with this curtailment, the company will lay off about 50 people. Including the 19 people laid off in the last two weeks, this will reduce total smelter employment by more than 150 compared to last Thanksgiving.
 According to Columbia's chief executive officer, Kenneth D. Peterson Jr., two factors combine to cause this decision: world market prices for aluminum are at record lows and the continuing high prices and unreliable supplies of electricity from the Bonneville Power Administration (BPA).
 The collapse of world aluminum prices is directly related to the massive explosion of aluminum exports from the former Soviet Union. Most of this aluminum is produced by smelters that operate in open defiance of Russian environmental regulations and are subsidized by labor, energy and transportation costs that are still largely influenced by communist principles.
 "Our Goldendale smelter complies with the most restrictive environmental standards in the world," said Peterson, "but we are being forced to compete with Russian smelters that spew out 10 times more emissions than we are allowed and which pay wages perhaps 100 times lower than ours. What this means is that the world's dirtiest smelters are being allowed to smash the world's cleanest smelters. For our industry, as well as the titanium, nickel, magnesium, copper silicon and related industries, the situation is critical. Another six months of business as usual will result in Wall Street and many Main Streets being filled with the financial blood of the strongest American companies.
 "I am angry about this situation," said Peterson. "Columbia operates one of the world's most efficient aluminum smelters of its kind. We provide hundreds of family wage jobs in the Pacific Northwest and elsewhere in America, while operating with due regard for our environment. It is ironic that some environmental extremists are forcing the wasting of tens of millions of dollars on spurious proposals to allegedly improve the presence of certain fish in the Columbia River, while massive polluters in third world countries are threatening America's industrial heart with impunity."
 Peterson noted that for 13 of the last 16 months, BPA has been unable to provide 25 percent of the electricity requirements of Columbia and other Northwest aluminum producers. On Friday, Nov. 19, BPA announced that this 25 percent power restriction would continue at least through December 1993. "Neither BPA nor anyone else is able to supply the power we need to operate at reasonable prices," said Peterson. "Other countries -- Brazil, Holland, New Zealand and Greece, for example -- have recently reduced the cost of electricity to aluminum smelters to help deal with the current situation. In contrast, BPA's prices to our smelter have skyrocketed 25 percent since 1992, in large part because BPA is being asked to fund a variety of social projects, including questionable fish restoration and conservation investment. There is a real risk that the burden of these costs will significantly harm America's balance of trade and this region's manufacturing base. Any system that encourages this outcome is seriously out of whack.
 "While times are tough for everyone in our industry, I have no doubt that Columbia will survive. Fortunately, our downstream operations are making solid contributions to our earnings. Unfortunately, we will have to endure significant pao?n the primary side of our business. We will be using all our resources to protect as best we can the livelihoods of our employee-owners in this tough time," said Peterson.
 -0- 11/23/93
 /CONTACT: Kenneth D. Peterson Jr. of Columbia Aluminum, 206-896-8425/


CO: Columbia Aluminum Corp. ST: Washington, Oregon IN: MNG SU:

IC-TM -- SE006 -- 7472 11/23/93 19:05 EST
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Publication:PR Newswire
Date:Nov 23, 1993
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