High summer power costs put jobs at risk as Boyne aluminium smelter forced to cool off

Soaring summer Queensland electricity prices are severely impacting on the Gladstone based Boyne Smelter with output to fall and 1100 jobs at risk.

Talks with the State Government and electricity suppliers have failed to find a solution to the dilemma and the company admits it is at a loss to understand why it can't get competitive energy or what the cause of the high prices may be.

Because it can't get a competitive electricity price it will now reduce aluminium production by about 14,000 tonnes for the first three months of 2014 "due to the high Queensland electricity prices over the summer months making production uneconomic in current market conditions".

Boyne Smelters general manager, Joe Rea, said the company wanted to operate Boyne Smelters at full production however the price for electricity over the summer period in Queensland makes it uneconomic.

"While the outcome will be challenging for the smelter we have been able to reach a commercial outcome that will enable the smelter to return to full production from April 2014," Mr Rea said.

"The curtailment of production is extremely disappointing given the smelter's owners have invested more than $750 million on capital improvements in recent years.

"It is an ongoing concern for our business that electricity prices in Queensland are significantly higher than other states in Australia at a time when the price for aluminium in Australian dollar terms is twenty per cent lower now than during the Global Financial Crisis," Mr Rea said.

"The Queensland Government is aware of the challenges facing Boyne Smelters. Meetings have been held with senior government ministers," a spokeswoman said.