Alcoa relief as federal, state governments seal bailout deal

The federal government will provide $30 million for Alcoa as part of a $230 million deal for the company’s troubled aluminium smelter in Portland, Victoria, according to the ABC.

Prime minister Malcolm Turnbull and Victorian premier Daniel Andrews jointly announced the bailout this morning that also involves a four-year electricity deal with the energy company AGL.

Turnbull said that the rescue package would allow Alcoa workers to feel more secure financially.

“We’ve seen all those pots that were frozen and how they’ll be cleaned out, starting today,” Mr Turnbull said.

Before the deal, Alcoa was unsure whether it would continue to operate all of its Victorian facilities or close them altogether. A blackout last year caused one its of its potholes to close, which added to the company’s woes. Former federal industry minister Greg Hunt and his Victorian counterpart, Wade Noonan had travelled to Alcoa’s New York headquarters before Christmas to secure the smelter’s future.

The new AGL deal to supply electricity to the Portland plant will come into effect in August 2017. It will provide 510MW of electricity to the plant but AGL retains “rights in relation to the curtailment of the smelter at times of high electricity spot price”, according to an earlier ABC report.

Australian Workers Union delegate David Thomas said the plant would take some time to get back to full output.

“There’s different scenarios that management are playing out, but to get back to full production is going to take at least six to eight months.” The plant is currently operating at 33 per cent of total output.

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