Alcoa says Australia aluminium smelter running at 30 pct capacity

SYDNEY : Australia’s 300,000-tonnes-per-year Portland aluminium smelter is operating at below a third of its capacity after power to the plant was temporarily knocked out three weeks ago, operator Alcoa Corp said on Wednesday.

The smelter was hit when a power interconnector between the states of Victoria and South Australia went down, cutting power to both of the plant’s potlines, and raising questions about its long-term future.

“The smelter has been operating at less than 30 percent capacity since a fault on the Victorian transmission network on Dec. 1 caused a more than five-hour power outage at the plant,” Alcoa said in a statement.

It said Alcoa Chief Executive Roy Harvey met with Australia’s industry minister Greg Hunt in New York this week, and expressed appreciation for the extensive assistance offered to restart the smelter’s lost production.

Alcoa said in May it would continue to implement cost saving measures at the Portland smelter, but its future would be decided by an ability to remain internationally competitive.

A recent recent rise in electricity prices had added to pressure on the smelter, which has also been battling a years-long glut in the global aluminium market.

Australia has been looking at the possibility of deploying funds from its Clean Energy Finance Corp to help build a new gas-fired power station to supply the smelter, or using wind turbines to supply the works.

Harvey said Alcoa was “committed to continue working” with Australia’s federal and state governments.

A shut down of the smelter could also affect Alcoa’s Australian refineries that supply the alumina that is processed at the smelter.