Alcoa to scrap old ship to curtail cost amid mounting aluminium market challenges

Leading aluminium producer Aloca plans to decommission MV Portland, the ship used until now for domestic supply chain. Citing the parlous state of aluminium industry, the company said it was a strategic decision ahead of 2017, when operating life of Portand comes to an end. Cost to keep it operational would mean Alcoa will have to pump in millions of dollars. For the company, which announced to idle three smelters in the United States on November 2, doing that will be rather illogical even if that means taking on Australian labour unions and governmental authorities.

"The global aluminium industry is facing very challenging market conditions," an Alcoa spokesman notes.

"In Australia, our focus is on reducing operating costs and improving productivity to help all our facilities remain internationally competitive. Decommissioning the MV Portland is one of a number of cost saving measures being taken by Alcoa in an attempt to help protect approximately 700 direct jobs and many more indirect jobs associated with the Portland smelter," added the spokesperson.

Alcoa has chosen to sell the vessel and replace it with a more cost efficient method of delivery of alumina from Western Australia to the Portland aluminium smelter. Estimated savings are more than $6 million a year.

Alcoa applied for and was granted, on October 22, a temporary licence for 17 voyages using a foreign flag vessel to transport alumina between WA and Portland up to October 2016.