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MHM Metals suffers as Alcoa closes rolling mills

Alcoa’s decision to close its Point Henry and Yennora rolling mills by the end of 2014 has devastated MHM Metals.

Earlier this week Alcoa announced it would shut down its smelters and rolling mills in Australia.

At the time the company said “the 50-year-old smelter, which has been under strategic review by the company since February 2012, will close in August, shedding 500 jobs. Almost 500 jobs will be lost elsewhere as the company closes two of its rolling mills”.

The news was a surprise to MHM, which is supplied the majority of the salt slag it processes from Alcoa’s Yennora facility, with MHM stating it “had no prior warning”.

“The permanent closure of Yennora in itself is likely to have a detrimental impact on the revenues of MHM in the second half of the year ending 30 June 2015 and thereafter if the company is unable to source alternative processing arrangements,” it said in a company statement.

However it did add that it would receive revenue from Alcoa for at least the rest of 2014 and from NMP sales.

The company is now carrying out a strategic review of its options regarding the Moolap plant, its processing systems, future sources of salt slag, and its assets in the US.

MHM chairman Ian Kirkwood said “Alcoa’s announcement to permanently close its Yennora operations is clearly a setback for MHM and particularly disappointing after all the very hard work management and staff put in since late 2012”.

“The more so since the Moolap plant is beginning to run very well especially following the installation of the new filter press last year. However, the directors are determined to move the company forward despite Alcoa’s decision. MHM currently has cash and cash equivalents of approximately $3 million and no debt which allow the company time to examine and assess a number of options.”

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