Portland aluminium smelter's future safe for now

PORTLAND'S aluminium smelter has escaped the knife for now as international giant Alcoa today announced it was considering curtailing its Point Henry operation near Geelong.

Alcoa's Australian managing director Alan Cransberg said Point Henry had become unprofitable and production may be cut back in the face of continuing difficult global economic conditions.

At stake are the jobs of 600 employees.

It has a 55 per cent stake in Portland Aluminium which employs 570.

The best assurance The Standard could ascertain on the south-west smelter's future was "we will need to manage through some significant economic challenges in order to remain viable".

"Portland faces the same market conditions as Point Henry," community relations officer Amy Blundell said.

"Portland is a more modern facility and is not included in the current review.

"It is essential that at Portland Aluminium we remain focussed on ensuring the smelter operates safely and efficiently and that we continue to meet our cost and production targets."

Alcoa trimmed back its Portland operation by 15 per cent about 18 months ago and is the region's biggest employer.

Mr Cransberg said global economic conditions were severely impacting the aluminium industry, with various companies, including Alcoa, announcing the review, closure or curtailment of smelters in Australia and overseas.

"A combination of factors, including metal prices, input costs and exchange rates, have resulted in the Point Henry smelter becoming unprofitable," he said.

"Together with our employees, we have worked hard to minimise costs and improve margins, but the current situation makes it difficult for Point Henry to be globally competitive in the foreseeable future.

"Our goal is for Point Henry to continue operating and meet its profitability targets.

"However, one possible outcome of the review is that production at Point Henry may be curtailed.

"I know this is unsettling news that creates uncertainty for our employees and the many people that depend on the smelter for their livelihood.

"We will do all we can to ensure the smelter is competitive."

Mr Cransberg said Alcoa hoped to complete the review by the end of June and make a decision about the smelter's future at that time. The associated aluminium rolling mill at Point Henry and Anglesea power station are not included in the review.

He said the review had not been prompted by a future price on carbon.

"The future price on carbon would be an additional cost, but Point Henry smelter is already losing money," he said.