Future of Portland aluminium smelter uncertain over power contract termination

<p>Portland aluminium smelter&rsquo;s future is hinged on the decision of one of its three owners- whether to terminate the supply contract it has with its power supplier or not, reported individuals who are aware of the developments in the Victoria plant. The decision, if taken, will put as many as 2000 jobs - direct and indirect at risk. Ripple effects of the closure are to be felt in a much promiment manner since the smelter consumes around 10 per cent of Victoria's entire electricity output.<br /><br />The move follows the decision of the Victoria government earlier this year to not extend subsidies provided to keep the plant in operation. The fixed subsidy which is inplace since lat two decades expires in Novemberthis year.<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/Portland.jpg" alt="News" width="420" height="480" /><br /><br />There were speculations about the future of the aluminium smelter for several years now, initially in the wake of the strong Australian dollar and more recently due to the price for the output from the plant. AGL Energy, one of Australia's leading integrated energy companies providing electricity to Portland aluminium smelter from its Loy Yang A power plant in the Latrobe Valley, said it expects the other three owners will also move in favour of terminating their agreements.<br /><br />The aluminium smelter complex is majority owned by Alcoa and its JV partner Alumina, with China's CITIC and Japan's Marubeni Corp, holding smaller shares.<br /><br />AGL said the contracts are so-called 'hedging contracts' which were due to take effect from November 2016. The contracts have a 12-month termination period so they will actually finish in 2017.</p>