Alcoa gets $230m lifeline for Portland aluminium smelter

ALCOA’S Portland aluminium smelter has secured a four-year lifeline after striking a new electricity deal with AGL and receiving a $230 million government rescue package.

Portland's Alcoa aluminium smelter has been given a lifeline.

ALCOA’S Portland aluminium smelter has secured a four-year lifeline after striking a new electricity deal with AGL and receiving a $230 million government rescue package.

The measures help secure the jobs of 540 workers at the smelter which is critical to the health of the economy in Portland.

Alcoa yesterday said it would move to restart capacity at the smelter which has been curtailed since a power cut in December damaged equipment.

The smelter has been operating at 30 per cent capacity — costing it $1 million in revenue a day — since the blackout.

The Federal Government will provide $30 million to Alcoa while the State Government is understood to have stumped up $200 million.

Alcoa has also struck a new four-year discount electricity deal with energy giant AGL to provide 510MW of power to the smelter.

The supply deal is equivalent to 10 per cent of Victoria’s total electricity load. Under the agreement AGL will have the right to curtail the smelter’s operations at times of high electricity spot prices.

The future of the smelter has been in doubt since a power subsidy it has received from the State Government expired in October.

The looming closure of the Hazelwood coal-fired plant and the December blackout added to viabilityquestions.

Alcoa chief executive Roy Harvey said the deal: “Will help make the Portland smelter more resilient against market volatility, maintain hundreds of jobs and provide a bridge to a potential long-term energy solution,” he said.

Shares in AGL closed 1 per cent higher at $22.77. Shares in Alumina, which is majority owned by Alcoa, closed 1.6 per cent lower at $1.795.

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