Horsehead has 'increased expectation' it will close Beaver County plant this year
Horsehead Holding Corp. said Wednesday it has an “increased expectation” that its Beaver County zinc plant will close by the end of the year while it awaits a decision from Royal Dutch Shell plc on buying the site for a petrochemical plant.
The chemical arm of Shell has a June 30 deadline to buy land in Center and Potter. The company and Horsehead signed an extension of a purchase option in December.
Shell may build a multibillion-dollar ethane processing plant there and needs time to assess its suitability, a Shell spokeswoman has said, though she could not be reached Wednesday.
State leaders and others courted Shell officials and pitched the project as a potential economic boon. The plant would take ethane, a byproduct of gas drilling in the Marcellus shale, and convert it into the building blocks for plastics.
Horsehead issued fourth-quarter earnings, recording a $16 million charge to partially adjust the value of the Monaca plant before closing it. Horsehead will move its operations to a zinc manufacturing plant in North Carolina this year.
“Because of our progress in North Carolina, we've increased our expectation that we will be closing the (Monaca) facility down in 2013,” said spokesman Ali Alavi.
Shell officials haven't indicated to Horsehead that they are nearing a decision on the land purchase, he said.
Shell has more to study than when the parties entered into the purchase agreement last year, he said.
On a conference call with analysts, Horsehead CEO Jim Hensler said Shell is taking a close look at the project but did not elaborate.
A spokeswoman for Shell could not be reached.
“They're doing their due dilligence. As long their boots are on the ground here, we're happy,” said Beaver County Commissioner Tony Amadio, regarding Shell's progress.
Horsehead said it lost $11.2 million, or 25 cents a share, in the fourth quarter, compared with a loss of $12.7 million, or 29 cents a share, a year ago.
Excluding the writedown of the Monaca plant's value, hedges and gains on purchases, Horsehead said it had a profit of $900,000, or 2 cents a share, in the quarter versus a loss of $4.4 million, or 10 cents a share, in the fourth quarter of 2011.
Sales were $110.6 million compared with $109.1 million for the fourth quarter of 2011.
Despite lower zinc prices and the other expenses, “the underlying operating performance of our businesses continued to improve in the fourth quarter,” Hensler said.
Horsehead said its unit that recycles electric arc furnace dust processed 23 percent more despite lower steel industry output. Its zinc smelter output was 5 percent higher than during the fourth quarter of 2011 and 11 percent higher than during the third quarter of 2012.
Shipments of zinc products were up 10 percent compared to last year and 5 percent higher than the third quarter.
During 2012, the Monaca smelter produced 146,000 tons of zinc, the highest level in the company's history, Hensler said.
“Construction of our new zinc plant project in Rutherford County, N.C., continues to be on schedule for ‘first zinc' production in the second half of this year,” he said. The plant is estimated to cost $415 million.
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Oil’s rebound pushes up price at gas pumps
- Mylan rejects Teva’s $40 billion takeover bid
- Experts: If health insurers’ safeguard goes broke, consumers could pay
- Kings Family Restaurants sold to California firm
- Visa limits vex businesses
- Methane leaks reportedly decrease in Pennsylvania
- Hearing set on Highmark plan to put $175 million in Allegheny Health
- MedExpress bought by United Health Group
- Paper’s prevalence unlikely to diminish
- California drought may be felt in Pittsburgh restaurants, groceries
- DeVry shift to online classes prompts closing of Pittsburgh campus