Berlusconi to Alcoa: hold off on smelter idling in Italy till EU rules on electricity rates

Berlusconi appeals to Alcoa on smelters

ROME — Italian Premier Silvio Berlusconi is appealing to Alcoa to hold off on temporarily idling its two smelters in Italy until the European Commission rules on electricity tariffs, his office said Friday.

Alcoa workers occupied part of the tarmac at Cagliari airport in Sardinia in a noisy protest of the company’s plans for nearly several hours, causing several flights to be delayed or canceled. The workers came from an Alcoa plant in Portovesme on the island.

On the mainland, striking workers at another Alcoa plant, in Fusina, near Venice, blocked the gates in the morning, preventing trucks from entering or leaving, the Italian news agency ANSA reported from Venice.

Late last year, Alcoa Inc. said it would idle production at the smelters, affecting about 2,000 workers, after a European Union decision left uncertainty about the company’s ability to secure electricity for the plants at low rates.

The premier’s office said Berlusconi wrote to Alcoa CEO Klaus Kleinfeld asking the company to “keep production activity” in the Italian plants and not make any decision about them before the European Commission expected within February.

Berlusconi wrote that not heeding his appeal might have repercussions on government relations with Alcoa.

For 10 years, Italy had given energy-intensive industries a break on power prices. The tariff was approved by the European Commission in 1995, when Alcoa, headquartered in New York, purchased the smelters. Without that subsidy, Alcoa said the smelters can’t make money.

But the EU ruled in November that Italy’s extension of electricity subsidies after 2005 did not comply with regulations, and is demanding that Alcoa repay those benefits to the state. Alcoa is appealing.