Norsk to close aluminium smelter, 344 jobs lost

Norsk Hydro has announced plans to close its Kurri Kurri smelting operation, as a result of weak earnings and an uncertain outlook for the future of the business.

Norsk said yesterday it was in “consultation” with the plant’s 344-strong workforce to deliver the bad news.

According to Hydro's Primary Metal business area executive president, Hilde Merete Aasheim, the profitability of the Kurri Kurri plant – new Newcastle – has suffered as a result of low metal prices, weak economic conditions, and the strong Australian dollar.

Norsk’s management team have reportedly performed a “thorough review” of the business, deeming it unprofitable in the short term, and likely unprofitable in the longer-term due to increasing energy costs and the impending carbon tax.

"The current cash losses are significant, with no sign of improvement anytime soon. We have therefore started to consult about full curtailment and will maintain a close dialogue with employees, unions and local stakeholders," said Aasheim.

"Our Kurri Kurri workforce has worked intensively to improve the plant's cost position and no stone has been left unturned. Despite extensive efforts to improve profitability, we are faced with a very challenging situation at Kurri Kurri.”

The Norwegian-owned smelter has reportedly been struggling for some time, with around 50 jobs, or 10% of the Kurri Kurri plant's workforce, slashed in November last year.

In January this year, Norsk Hydro cut the capacity of its Kurri Kurri operation by 33%, ceasing production at one of its three pot lines, and citing low metal prices as the main reason for its decision.

The Kurri Kurri plant formerly ran three pot lines, with a reported annual production capacity of 180,000 metric tonnes. Since the January closure, the plant has been running at a 120,000-tonne capacity.