Global aluminum producer Alcoa’s smelter in Portland, Victoria is slated to remain operational after the company secured electricity generation agreements with three Australian power companies.
The company said in a statement on Friday that the new electricity charges agreed with Alinta Energy, AGL, and Origin will come into effect after the existing agreement with AGL expires on Jul 31. Roy Harvey, chief executive officer, Alcoa said that the new agreement would help in improving the smelter’s competitiveness by keeping the costs low and improving its operability.
Alcoa has also agreed to participate in the country’s Reliability and Emergency Reserve Trader (RERT) initiative. Under this project, the smelter will shed load quickly to protect the province’s power grid from unexpected interruptions. In return, the federal government will provide A$76.8mn at around A$19.2mn ($14.8mn) per year over the next four years, with Victoria’s state government proposing a funding package to match.
Additionally, state and federal subsidies worth approximately A$160mn ($120mn) will secure the smelter’s operations and jobs, Alcoa indicated. The smelter’s fate had become uncertain after Alcoa announced plans to cut costs and sell some of its global loss-making assets last year. The company’s smelter in Victoria is the state’s biggest electricity consumer, using nearly 10pc of the state’s power supply, according to reports.
($1=A$1.29)