Platts
June 25, 2014
By Bob Matyi, with Anthony Poole in New York

Felman's West Virginia silicomanganese plant unlikely to restart before July: AEP

Felman Production's idled 105,000 mt/year silicomanganese plant in New Haven, West Virginia, is unlikely to be restarted until July at the earliest because a special electricity rate contract recently signed by the company and its power provider has yet to be filed with state regulators, Appalachian Power said.

Jeri Matheney, spokeswoman for Appalachian Power, said that the parties hope to submit the contract to the Public Service Commission for approval by June 30.

Although Matheney indicated the American Electric Power subsidiary expects the contract to be quickly endorsed by the PSC, that could not be confirmed by PSC spokeswoman Susan Small.

Small said the PSC would want to review the terms of the agreement to determine the impact it could have on APCo's other customers. She declined to predict how long that might take.

Florida-based Felman wants the contract approved before it resumes production at the plant for the first time since July 2013.

Felman representatives have repeatedly declined to comment publicly on precisely when the restart will take place.

According to Roy Martin, vice president of United Steelworkers union Local 5171 at the plant, Felman has recalled about 70 workers to prepare for the restart. Martin had expected, however, that production would resume in June.

The PSC on May 14 denied requests by several parties to reconsider a favorable April 3 electricity rate ruling for Felman.

The PSC approved most of Felman's request for rate relief, granting a discount of up to $9 million annually. The company had asked for $9.5 million a year for 10 years.

But precise terms still had to be negotiated by Felman and APCo before they could take effect.

The domestic market for silicomanganese is about 400,000 mt/year, meaning the New Haven facility accounted for about 25% of the market. But Felman, together with its parent company, Georgian American Alloys, had an estimated market share of just over 50% in the US, according to ferroalloys industry sources, using the silicomanganese produced in the US by Felman and imports of silicomanganese from Georgia in the former Soviet Union.

According to manganese market sources, Felman has bought manganese ore in preparation for a restart and ferroalloys sources said the company has bought silicomanganese to enable it to meet its long-term contractual obligations to steel mills.