Future of Victoria’s aluminium smelter hangs in balance
The nation’s economy would take an $800 million hit and Victoria would lose thousands of jobs if its Alcoa aluminium smelter closes. Now state and federal governments are in negotiations over the future of the site.
Victoria
Don't miss out on the headlines from Victoria. Followed categories will be added to My News.
Thousands of jobs and $800 million would be stripped from the country’s economy if Victoria’s aluminium smelter shuts, as deals to secure its operations hang in the balance.
State and federal governments have begun negotiations over the future of the site, run by US manufacturing giant Alcoa, with the sticking points a fresh power deal and the size of taxpayer subsidies.
A new report by the Australia Institute shows that if the smelter folds, it would kill $250 million in household incomes as well as $192 million in Commonwealth revenue. Overall there would be an $800 million hit to GDP, a loss of $840 million in exports, and 3600 jobs would go begging .
Last night state treasurer Tim Pallas said the Andrews Government had previously “stepped in to keep Alcoa open and we’re working to make sure it has a secure future”.
The smelter’s future has hung in the balance for years, due to rising costs and challenges in the manufacturing sector. In 2017, governments provided $240 million in direct subsidies and helped secure a new power deal for the plant that uses up to 8 per cent of the state’s electricity.
Australian Workers’ Union state secretary Ben Davis, who commissioned the report, said the smelter’s ability to stabilise the grid at times of summer peak was another reason it must be backed in. “The economic impact of Alcoa closing the Portland smelter would be unprecedented,” Mr Davis said.
“The report makes it quite clear that including supply chains, contractors and other associated businesses, that the closure of the smelter would cost thousands of jobs in western and southwestern Victoria,” he said.
The Australia Institute report, by Dr Jim Stanford, also looks at the “missed opportunity” governments have had to bolster the smelting capacity in the state, with exports of cheap bauxite skyrocketing while refined products have stagnated. It also flags the potential for a reshaping of energy contracts with the smelter in coming years, as more renewable energy comes online.
Mr Pallas said the government “remains in discussions with Alcoa about a sustainable future for the smelter, because we know how important it is for local jobs and the regional economy”. He said it was also being discussed with the federal government.
A spokesperson for federal Energy Minister Angus Taylor said “the government is committed to ensuring that all businesses, including those operating in key sectors such as aluminium, have access to affordable, reliable power”.
An Alcoa spokeswoman said: “Alcoa appreciates the Australian Workers’ Union’s recognition of the significant economic value Portland Aluminium Smelter provides to the Portland community and Victoria including through direct and indirect employment and local purchasing.”
MORE NEWS
NSW PREMIER MOCKS VICTORIA'S DOUGHNUT DAYS
V/LINE BOSS SACKED AMID IBAC PROBE