Late last year, speculation surrounding Columbia Falls Aluminum Company’s reopening ramped up again. It never happened. Instead, five months later CFAC asked for a 95 percent reduction in property taxes, hoping to take advantage of a little-used law that at once requires the plant to be shuttered for six more months and shortchanges a school district that isn’t exactly rolling in the dough.
But you know who has a lot of dough? Glencore International AG, the parent company of CFAC. In fact, its top executives are about to get a whole lot richer when the company goes public and begins floating shares this month. The move will create at least five billionaires, including CEO Ivan Glasenberg, who Forbes reports could be worth almost $10 billion, making him richest man in South Africa and 73rd richest in the world.
To add a little more perspective, a report in Bloomberg found that Glencore’s initial public offering could yield more for Glasenberg than the Google founders earned in their IPOs. Despite that, the company can’t pay its relatively paltry property tax bill in Columbia Falls, a town that has absorbed heavy job losses over the last few years and has waited patiently, and politely, for the aluminum plant to reopen.
Meanwhile, declining enrollment, part of which can be attributed to jobs lost at CFAC, has decimated Columbia Falls’ School District 6’s budget. The district is closing Canyon Elementary in Hungry Horse at the end of this school year to save money and its projected budget still calls for more teacher cuts.
Yet since 2006, CFAC – one of the largest property taxpayers in Columbia Falls – has regularly protested its bill. And the reduction it sought this year would cost the school district almost $190,000 for 2011. But unlike previous years, this reduction would actually be transferred to other property taxpayers in the district – or non-billionaire homeowners.
CFAC is unlikely on Glencore’s radar. The Swiss commodities company is busy brushing up its larger image before going public and has been forced to deflect mounting criticism. The UK’s Daily Mail recently published a report accusing the company of evading taxes at a copper mining operation in Zambia. Glencore has denied any wrongdoing. (Remember, Marc Rich, who was indicted for tax evasion and trading with Iran before being pardoned by former President Bill Clinton on his last day in office, founded this company).
But the prospect of CFAC reopening looms large in Columbia Falls, and the rest of the Flathead for that matter. It could create dozens, if not hundreds, of good-paying jobs in a region that desperately needs them. And obstacles standing in the way of that appear smaller than before.
The aluminum market has grown. In December, Bonneville Power Administration and CFAC appeared close to reaching a deal on a long-term contract, which was previously cited as the main reason for curtailing production. Montana’s senators are now pressuring Glencore to reopen the plant and publicly questioning why a company that stands to raise as much as $12 billion in a public offering wants to skirt paying property taxes in Columbia Falls.
If Glencore has no short-term plans to reopen its plant, then it should sell the property to someone who does. Other entities have already expressed interest in purchasing or leasing parts of the sprawling complex. The Flathead County Economic Development Authority, with a $1.147-million grant from the U.S. Economic Development Administration, discussed building a rail-served industrial park on the site. But it didn’t pan out.
Whether deserved, the longer the aluminum plant sits idle, the more it appears Glencore is holding a vital piece of this area’s economy hostage. It’s time to fire up the plant. Or it’s time for Glencore to cut its losses and sell. It appears the company can afford that.