Alcoa to resume Portland aluminium smelter post AGL power deal

Alcoa announced on Friday morning that its Portland aluminium smelter will resume production of the lost capacity after the federal and Victorian governments offered rescue packages for the smelter worth A$30 million ($23 million) and promises to keep the smelter open till 2021.

The company also secured electricity supply agreement with the energy company AGL for the Portland smelter. Alcoa said the smelter will return to 85 per cent capacity that it was functioning at before December 2016.


Australian Prime Minister Malcolm Turnbull told the smelter's workers, "This is our commitment to ensure that you can get back on your feet and get going again, creating great export dollars and defending 700 jobs here and over 2,000 in the region."

The four-year electricity supply deal with AGL will come into effect in August 2017 providing 510MW electricity to the smelter; the price of the new deal was not revealed though. AGL said the under the deal, Alcoa will have flexibility including "rights in relation to the curtailment of the smelter at times of high electricity spot price."

{googleAdsense}

The Portland area has been facing frequent power supply problems and price hikes as the neighbouring South Australian State has grown increasingly dependent on alternative energy sources such as wind and hydroelectricity.  This has made Portland reliant on back-up power link from Victoria and gas-fired plants.

Alcoa’s aluminium smelter in Portland was damaged in December 2016 due to high power flow that caused molten aluminium to solidify.