Hancock County breathed a sigh of relief last week when Century Aluminum
announced it reached an agreement for a new power contract with E.ON US/Big
Rivers. The fate of Century's aluminum smelter in Hawesville hinged upon
obtaining a new contract providing the smelter with a steady supply of
reasonably priced power.

Tension in the community skyrocketed late last month when Century balked at
signing a new power contract due to provisions in the original agreement.

After modifications to the power unwind agreement with Big Rivers/E.ON U.S,
Century Aluminum signed the new power contract last Wednesday. The move
pleased all parties involved.

"We are delighted to be able to participate in the unwind agreement,"
Hawesville Vice-President and plant manager Matt Powell said in a company
press release. "All of the parties have worked tirelessly to achieve a
mutually beneficial outcome.

"Although we still face significant issues in the near-term as a result of
depressed aluminum prices, the unwind agreement is a major step forward for
the long-term viability of the smelters and for the economic health of the
local communities here in western Kentucky."

Century refused to sign the power contract last month due to a take-or-pay
provision in the contract. This provision proved extremely troublesome to
the company because it obligated Century to pay for a specific amount of
power regardless of whether the company used that much electricity or not.

The current contract retains the take-or-pay provision, but E.ON agreed to
modifications that drastically reduced the near-term risk to the company,
Century Aluminum's Director of Corporate Communications Mike Dildine said.

E.ON agreed to defer the $40 million lump-sum amount it agreed to pay
Century to help reduce its power costs under the new contract.

According to the press release announcing the agreement, "E.ON will now pay
these amounts as and if Century consumes power under the contract. At
Hawesville's current production rate, Century would received the entirety of
these economic benefits over approximately eighteen months."

Dildine said this provision gives Century the incentive to produce at full
capacity.

"We have to produce to get that $40 million payment," he said.

The company hopes by the time this provision of the contract expires, the
current economic crisis is over and aluminum prices stage a comeback.

Background

Low cost energy is essential to Century Aluminum's survival. An aluminum
smelter needs an enormous amount of electricity to conduct daily operations.

A study by University of Louisville economist Dr. Paul E. Coomes, who
studied the Alcan plant in Sebree and Century's Hawesville operations, says
an average aluminum smelter can use as much electricity as a mid-sized city.

At full production capability, the Hawesville smelter uses 490 megawatts of
energy. In fact, electricity accounts for one-third of Century's operating
cost.

Inexpensive energy drew aluminum smelters to the
Evansville-Owensboro-Henderson Economic Area, of which Hancock County is a
part. When companies began locating in the area, they negotiated fixed
priced contracts with local power providers. Century's current contract
expires at the end of 2010, which is why the company negotiated a new power
contact with E.ON.

"Aluminum smelters use so much energy," Dildine said. "They need a secure
supply of cost-based energy. That's what this contract gives us."

The new contract runs to 2023, Dildine said. Though the company pays more
for its electricity under this new contract versus the old one, the agreed
to price is much lower than the open market price.

Currently, the Coleman station beside Century provides the company with its
power.