Alcoa’s Portland aluminium smelter will receive subsidies from the Australian government for income losses caused by unavailability of electricity during peak energy demand periods until 2025, according to local media.
The Australia government proposed to underwrite Alcoa’s Portland smelter and commit AUS76.8mn ($58.06mn) through Commonwealth funding which will secure the plant until 2025. The decision in part was to save around direct 600 and 3,500 indirect jobs and state of Victoria’s power gird, according to Australian media reports. Alcoa consume 10pc of Victoria’s power supply and is vital to the girds stability as well as electricity tariffs in the region.
Alcoa plans to review and close down a few of its smelters, globally in order to cut down losses and emissions. The plant is receiving a government electricity subsidy of $200mn which ends in 2021. In November, Alcoa announced intentions to invest in the Portland smelter if it secures an agreement to source affordable power supply. Australia aims to cutback on coal-fired power generation and is keen to nudge Alcoa to upgrade its smelter to adopt clean energy option including hydrogen fuel.
Alcoa expects 2020 aluminium shipments to reach 2.9-3mn mt due to better production, as reported by Davis Index.
($1=AUD1.32)