Bell Bay Aluminium recovers but issues still persist

In 2011, when Ray Mastogi joined the Bell Bay Aluminium as general manager, the conditions were very weak and it was almost close to a shut down. Now, although the conditions are still bleak, they have recovered greatly since then.

The 59-year old smelter has had to cut down its workforce by 20 percent over the last two years which has saved the company $250 million. Now the company has 435 direct and around 1500 indirect employees generating $690 million p.a. contributing significantly to the state’s GDP. Bell Bay Aluminium has produced more than 189,000 tonnes of aluminium in 2013.

The smelter recovered under the clever guidance of Mr Mostogi and some tough decisions like job cuts, pay freeze and cutting through redundancies. The company has also had to resort to buying lower grade alumina but still managed to produce top quality product.

However issues still remain which generally includes the RET payments, which is costing the company $10 million a year and since the price of aluminium is fixed by the market and not the producer, they are not able to recover this cost through prices. Electricity costs are also very high in Australia accounting for nearly 30-40 percent of the cost base, plus there is the competitive freight rate.