Platts
June 30, 2014
By Bob Matyi

Felman to restart one silicomanganese furnace on July 2, second furnace in August: USW

Felman Production is aiming for a partial restart on July 2 of its idled 105,000 mt/year silicomanganese plant in West Virginia, a United Steelworkers union official told Platts on June 30.

The company intends to start furnace No. 2 at the New Haven plant this week, then resume operating furnace No. 5 in August, according to Roy Martin, vice president of USW Local 5171 at the plant. Martin added that Felman has not made any plans yet to restart the third furnace at New Haven. The plant has been idled since the beginning of July last year.

A Felman spokesman declined to comment on June 30 on the status of the company's restart plans. But a source familiar with the situation said an announcement from Felman about the restart was imminent.

In recent weeks the company has called back more than 70 union employees in preparation for a restart this summer. The only question had been when, and the timetable hinges on when the West Virginia Public Service Commission signs off on a newly negotiated electricity rate agreement between Felman and Appalachian Power, an American Electric Power subsidiary, for electricity supply to the plant.

PSC spokeswoman Susan Small said the agreement was expected to be submitted to the commission before the end of the day on June 30.

Asked if it could be reviewed in time to allow for a partial restart on July 2, she replied, "That really depends on what they file."

The plant's future has taken several twists and turns during the past year. After the facility was idled, Felman told the PSC it needed lower electricity rates before it would restart the plant, saying high power costs had negatively affected the plant's profitability.

Although some consumer advocates disagreed, arguing the plant was profitable, the PSC in late March granted much of the rate relief sought by Felman. The commission approved a discount of up to $9 million annually, slightly less than the $9.5 million the company had requested. In denying the full discount, the PSC said it ensured that Felman would pay at least $500,000 a year toward APCo's fixed costs.

The PSC then directed Felman and APCo to negotiate specific terms of a new power deal. An agreement was reached recently.

The domestic market for silicomanganese is about 400,000 mt/year, meaning the New Haven plant accounted for about 25% of the market, when operating at full capacity. Its parent company Georgian American Alloys imported a significant quantity of silicomanganese into the US from Georgia and, combined with Felman's West Virginia production, supplied just over 50% of the US market, before the plant was idled, according to US ferroalloys market sources.