The Turnbull Government welcomes the announcement today that the Alcoa Portland Aluminium Smelter will remain open into the next decade. This is great news for the workers at the Alcoa smelter and the community of Portland.
A power supply failure to Alcoa last month caused damage to production lines and significantly reduced the operating capacity of the smelter.
The Turnbull Government is providing significant financial support to secure jobs at Alcoa and provide certainty for workers, with a $30 million direct grant to restore operations.
The financial support is conditional on operations at the smelter continuing until at least 30 June 2021 and maintaining production to at least 90 per cent of pre-outage levels.*
The funds are available for capital improvements, maintenance and repairs to damage caused by the outage.
The Turnbull Government has been in constant discussions with Alcoa since the outage. This included travelling with the Victorian Government to New York to meet with the company’s global head to reiterate the importance of the smelter’s operations for the 2000 direct and indirect jobs it supports.
The Turnbull Government will also work with Alcoa to seek a commercially viable long term solution for the smelter.
Alcoa has been in negotiations for a new power supply agreement and we welcome news that this has now been finalised with AGL. We also welcome the support provided by the Victorian Government.
The power outage at Alcoa highlights the importance of energy security and affordability for Australia’s manufacturing industries. The Turnbull Government is committed to working with the states to achieve this.
We have been working closely with Alcoa, AGL, the AWU and the Victorian Government, and thank and congratulate all parties for reaching agreements that will help to protect jobs in Portland.
We look forward to continuing to work together to secure the future of the smelter through the 2020s.
Conditions of Commonwealth support for Alcoa Portland Aluminium Smelter
- The assistance is subject to certain conditions, including that:
- the smelter must continue operations until at least 30 June 2021;
- production at the Smelter must aim to be at 300,000t per year (the production capacity prior to power outage) and must not fall below 270,000t;
- smelter operations will ramp up to full production over approximately seven months in 2017.
- Each Joint Venture Party will be required to provide an unconditional and irrevocable guarantee from an entity of sufficient financial substance (e.g. parent company) acceptable to the Commonwealth.
- Should the smelter close prior to 30 June 2021, the Joint Venture will be required to repay the funds plus interest according to the following schedule:
- curtailment/closure before 30 June 2019: Repayment of whole $30m;
- curtailment/closure between 1 July 2019 and 30 June 2020: Repayment of $15m;
- curtailment/closure between 1 July 2020 and 30 June 2021: Repayment of $7.5m
- curtailment/closure on or after 1 July 2021: nil.