Manufacturing News

Alcoa production cuts may lead to Geelong job losses

 

Alcoa the American owner of the Point Henry aluminium smelter in Geelong has announced that it is considering worldwide production cuts.

As reported in the SMH, the announcement has again put the future of the Point Henry aluminium smelter in Geelong in doubt.

The smelter employs around 500 people and a combination of the high dollar and low global aluminium prices have put it under pressure.

Last year Alcoa considered shutting the smelter but kept it open after receiving a $40 million bailout package from federal and state governments. The money came with the condition that Alcoa keep the plant open until at least mid-2014 as it worked on restructuring its operations.

Aluminium prices peaked in 2011 and have since fallen by a third. As such, Alcoa plans to cut 460,000 tonnes of its smelting capacity over the next 15 months. This amounts to 11 per cent of its global production.

''Because of persistent weakness in global aluminium prices, we need to review every option to maintain Alcoa's competitiveness,'' Chris Ayers, president of global primary products, said. ''Any action taken will only be done after a thorough strategic review and consultations with stakeholders.''

The company has smelting operations in Australia, the US, Brazil, Canada and Europe. Point Henry is considered at risk because it is unprofitability and has previously been under review.

A spokesman for Industry Minister Greg Combet commented, ''The federal government remains committed to its agreement with Alcoa regarding the Point Henry smelter.''

He pointed out that Alcoa was not specifically aiming to cut its Geelong operation and the review was of all of its operations, both here and overseas. 

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