Long-term future of Portland’s Alcoa smelter remains uncertain
The Alcoa smelter at Portland will remain open in the immediate future, but its long-term viability remains uncertain despite receiving a four-year $200 million government package in 2017.
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Portland’s aluminium smelter will remain open for at least another 18 months, but its future hangs in the balance when a government support package runs out next year.
American aluminium giant Alcoa confirmed this week that the smelter’s immediate operations were secure after months of uncertainty.
But Alcoa boss Roy Harvey said while the plant was operating well, its profitability was constrained by “one of the highest energy price markets on the planet”.
A four-year, $200 million package delivered to Alcoa by the state and federal governments in 2017 has kept the smelter viable with power subsidies. Australian Workers Union state secretary Ben Davis said it was now time for both governments to step up again to support the smelter, which directly employs at least 600 Victorians.
“I was heartened to have (Alcoa) confirm, what I suspected all along, that they have to keep the smelter open at least until next year,” Mr Davis said.
“But that does not change the fundamentals, which is Alcoa Portland needs a competitive power deal to stay open, and federal and state governments need to do whatever they can to make that come about.
“It needs to stay open as it would be a devastating blow for the southwestern economy were it too close.”
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Speaking with analysts about Alcoa’s quarterly results this week, Mr Harvey played down concerns about any imminent threat to the Portland operation.
“In between now and that particular moment in time (next year) we need to see if there is a re-powering solution or if there is another eventuality for that plant,” he said.
“So you’ll not see action on that, in fact part of that agreement (with the state and federal governments) is that we wouldn’t take action until the middle of 2021.”
South West Coast MP Roma Britnell said the state government needed to ensure “affordable and secure energy” to maintain the smelter’s long-term future.
“There is a very significant role for the Andrews Labor government to play … to help develop long-term solutions to lower energy prices so the smelter is not relying on short-term subsidies,” she said.