High-cost Victorian aluminium smelters could go under Alcoa cuts

US-based aluminium maker Aloca has confirmed that its Victorian smelters are being considered for closure as it comes under pressure to reduce production.

Alcoa reported a second-quarter net loss of $US 119 million this week, and has said that it would end high-cost smelter production as part of a 15-month review of its capacity announced in May.

"We've got high-cost capacity in Australia, we've got high-cost capacity in southern Europe and we've got some higher-cost capacity in parts of Brazil,"
The Australian reports CFO Bill Oplinger as telling investors during a conference call earlier this week.

The company’s two Victorian smelters, at Port Henry and Portland in Victoria, are two of its most expensive in the country. According to Aloca, these produce 30 per cent of the country’s aluminium.

Port Henry, open since 1963, is the most expensive of the two and is being kept open by Victorian state and federal government subsidies. The assistance was given on the condition that the smelter would be kept open until mid-2014.

Alcoa’s CEO Klaus Kleinfeld said under-performing operations would be shed and others in the industry should consider acting similarly.

"We're very committed to acting and I wish that this would be indicative to every company that's playing in our industry," he said.

Image: News Limited

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