Kaiser's Gramercy facility back on line following 1999 explosion
Kaiser Aluminum Corp. has resumed partial production at its Gramercy, LA, alumina refinery. The facility has been offline since a July 5, 1999 explosion in the digestion area of the facility injured 29 workers, rocked the neighborhood surrounding the refinery, and destroyed much of the plant.
The U.S. Department of Labor's Mine Safety and Health Administration (MSHA) fined Kaiser $533,000 for 23 violations of federal regulations stemming from the explosion. According to the agency, Kaiser management's "failure to identify and correct hazardous conditions and unsafe practices directly contributed to the early morning explosion."
"This accident points to the importance of management and employees working together to ensure that relief systems are in good working condition," said J. Davitt McAteer, assistant secretary of labor for mine safety and health. In the MSHA investigative report on the Kaiser explosion issued in February 2000, the agency concluded that excessive pressure in several large tanks caused the powerful blast that rocked the plant and the surrounding community.
Kaiser said it has revised the total capital cost of the rebuild and upgrade project to approximately $275 million from approximately $200 million. The revision reflects the installation of additional safety features in the digestion unit; enhancements to increase the capacity of the plant by the further 125,000 metric tons; and higher-than-expected engineering and construction costs associated with early efforts to accelerate the pace of the project.
"We are pleased that the plant has returned to operation and that we are now able to resume supply to Gramercy customers who have been so patient and understanding during the past 17 months," said Raymond J. Milchovich, Kaiser's president and chief executive officer. He said that the company was able to return the Gramercy plant to operation sooner than was expected.
"We are optimistic about the future of Gramercy as a facility with a reduced cost structure, improved environmental performance and product quality, and enhanced safety and operational integrity systems," said Milchovich.
The plant is expected to progressively increase production over the next several weeks to approximately 75 percent of its newly rated capacity. Production this year is expected to be approximately 40,000 metric tons. Construction of the final phase of the digestion unit is targeted for completion in March 2001.
Despite the higher cost of the rebuild, Kaiser continues to expect insurance recoveries to provide approximately 50 percent of the funding of the total project capital cost. The balance of the funding will be provided from Kaiser's operating cash flow and other resources.
Through Sept. 30, 2000, the company had spent approximately $163 million on Gramercy-related construction activities and received insurance recoveries of $73 million for capital expenditures related to the minimum property damage receivable.
The company posted photographs of the new digestion area on its Web site at www.kaiseral.com.
By Sandy Smith
Managing Editor, Safety Online
E-mail: ssmith@verticalnet.com