Massive Portland smelter risks closure as losses and costs surge Company documents filed in the US last month by Alcoa list Portland with six other plants with "idled" production.
They are listed next to 14 plants that have been closed or sold by Alcoa since 2007. Alcoa spokesman Brian Doy would not comment on whether Portland was losing money but said its focus was on "doing everything we can" to keep it internationally competitive. "The Portland smelter is a good asset, it is a very well run and relatively modern facility but like many smelters around the world it is under significant pressure due to persistently low international aluminium prices," he said. Analysts estimate the smelter's power costs will rise by about $50 million to $90 million as a government subsidy is removed and a new power contract starts with AGL in November. Alcoa's bid to offset that with a new subsidy on the cost of poles and wires for the transmission of electricity to the smelter was recently rejected by industry regulator, the Australian Energy Market Operator. The company is louis vuitton alma figue expected to appeal the decision. It is also understood Alcoa representatives are due to meet with federal Energy Minister Josh Frydenberg in coming weeks. Macquarie analysts estimate without the subsidy and the rising power contract from November, the Portland smelter could be on track for losses of more than $100 million a year. However, that does not include savings already achieved by Alcoa such as winning an exclusion from the national renewable energy target and a controversial decision to sell its ship the MV Portland and to replace it with a foreign flagged vessel. Crewmen on louis vuitton bags john lewis the MV Portland protest. Photo: Tekko Roos The possible departure of Alcoa comes amid a mass exodus of large manufacturing in Victoria, with large car makers set to leave Victoria and Australia. Fairfax Media revealed in December that Alcoa representatives had already started meeting with senior members of the Andrews government to press the case for assistance to keep the plant open. Another path for Alcoa is to try renegotiate the looming power supply contract with energy giant AGL, which was signed in 2010. Under the agreement AGL is due to commit electricity from the Loy Yang A brown coal power plant, which produces high levels of greenhouse gas, from November. Industry sources have suggested Alcoa will seek to negotiate with AGL, which refused to comment on the situation. If the smelter closes it could have significant flow on effects for AGL, the electricity market as a whole and the town of Portland. The smelter is responsible for almost 10 per cent of Victoria's electricity demand. Its exit would exacerbate the massive oversupply of power in the national electricity market and could put further pressure on coal fired electricity generators to shut. Analysts at UBS, in a separate report, louis vuitton agenda stickers have suggested AGL could stand to lose at least $18 million in a year if the smelter shut. The threat of closure has also rung alarm bells in the local community of Portland. Local Independent MP in the Victorian upper house, James Purcell, said: "All the businesses hang off Alcoa, or the workers of Alcoa. It would decimate the town.". Mr Purcell, who ran on a platform of job louis vuitton purses damier canvas creation in the state's south west, conceded the smelter would close at some stage in the future, but he said it needed to be a transition, "not a guillotine". He called on the Andrews government to help ensure the smelter stayed open long enough to develop new jobs in Portland, in industries such as renewable energy and agriculture. The local federal MP and Turnbull government frontbencher, Dan Tehan, told Fairfax Media that it was "extraordinarily vital to Portland that the smelter remains viable and operating and I will do everything I can to ensure that". Environment Victoria chief executive Mark Wakeham said any support should be short term and dependent on the smelter's move to cleaner energy sources than brown coal power from Loy Yang. He said Western Victoria more broadly needed a plan for new jobs, which could be delivered via the Andrews government's upcoming renewable energy plan.
A spokesman for Victorian Treasurer Tim Pallas said its focus was on supporting jobs. "We will continue to engage positively with Alcoa to ensure the best possible outcome for Portland.".
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