The Australian
Alcoa defers $3bn refinery plan over carbon tax fears
Edited by : AL CIRCLE
3 min read
MINING giant Alcoa has shelved a $3 billion expansion of its Wagerup alumina refinery in Western Australia for up to five years, in the latest sign of the group's struggle against the strong Australian dollar and the Gillard government's carbon tax.
The state's Environmental Protection Authority said it had granted Alcoa an extension to September 2016 to begin work on the expansion, confirming industry speculation that the project would remain on the backburner.
An Alcoa spokeswoman said yesterday the company would not return to the project until it understood the full impact of the $23-a-tonne carbon tax, which will be introduced on July 1, and had been able to secure energy supplies.
The move to further delay the project, which was first stalled amid the global financial crisis in 2008, came after Alcoa this month announced a review into the viability of its Point Henry aluminium smelter at Geelong in Victoria.
Alcoa mines bauxite in WA and refines at Wagerup, south of Perth. It exports some of the alumina or sends the rest to the company's two smelters in Victoria, including Port Henry, where it is transformed into aluminium. Top 50 Business Marketing Placement
Alcoa's woes in Australia highlight the dire state of much of the global aluminium industry, which has struggled to recover from the global financial crisis and the rise of China as a major producer.
Major producers including BHP Billiton and Rio Tinto have recently announced massive writedowns on their aluminium divisions.
Alcoa of Australia managing director Alan Cransberg said earlier this month that the carbon tax would increase pressure on his company, although he noted the Port Henry review was prompted mainly by the strong Australian dollar and high cost of power.
Mr Cransberg told The Australian last year that recovering Chinese demand for alumina could allow it to revisit the 2008 decision to shelve the expansion of the Wagerup refinery within as little as six months.
But he also warned domestic factors, including the carbon tax, could keep the greenhouse gas-emitting project on hold.
"I don't think there's anybody in the world who's going to put billions of dollars into the ground without understanding what are the rules for an ETS (emissions trading scheme) or a carbon tax," Mr Cransberg said.
The expansion, which was expected to create 1500 construction jobs, has an estimated capital cost of between $1bn and $3bn, depending on its ultimate size.
WA Premier Colin Barnett said in 2008 he expected the expansion would get under way within as little as 12 months, once the global financial crisis was over and demand for commodities had recovered.
The state's Environmental Protection Authority said it had granted Alcoa an extension to September 2016 to begin work on the expansion, confirming industry speculation that the project would remain on the backburner.
An Alcoa spokeswoman said yesterday the company would not return to the project until it understood the full impact of the $23-a-tonne carbon tax, which will be introduced on July 1, and had been able to secure energy supplies.
The move to further delay the project, which was first stalled amid the global financial crisis in 2008, came after Alcoa this month announced a review into the viability of its Point Henry aluminium smelter at Geelong in Victoria.
Alcoa mines bauxite in WA and refines at Wagerup, south of Perth. It exports some of the alumina or sends the rest to the company's two smelters in Victoria, including Port Henry, where it is transformed into aluminium. Top 50 Business Marketing Placement
Alcoa's woes in Australia highlight the dire state of much of the global aluminium industry, which has struggled to recover from the global financial crisis and the rise of China as a major producer.
Major producers including BHP Billiton and Rio Tinto have recently announced massive writedowns on their aluminium divisions.
Alcoa of Australia managing director Alan Cransberg said earlier this month that the carbon tax would increase pressure on his company, although he noted the Port Henry review was prompted mainly by the strong Australian dollar and high cost of power.
Mr Cransberg told The Australian last year that recovering Chinese demand for alumina could allow it to revisit the 2008 decision to shelve the expansion of the Wagerup refinery within as little as six months.
But he also warned domestic factors, including the carbon tax, could keep the greenhouse gas-emitting project on hold.
"I don't think there's anybody in the world who's going to put billions of dollars into the ground without understanding what are the rules for an ETS (emissions trading scheme) or a carbon tax," Mr Cransberg said.
The expansion, which was expected to create 1500 construction jobs, has an estimated capital cost of between $1bn and $3bn, depending on its ultimate size.
WA Premier Colin Barnett said in 2008 he expected the expansion would get under way within as little as 12 months, once the global financial crisis was over and demand for commodities had recovered.
Previous article
Alumina Import Boosted in January
Next articleCarbon tax to push alumina refining to China, says Rusal
Grow with
AL Circle
