Alcoa to restart long idled capacity at Australian aluminum smelter

Credit: Wikimedia Commons

Alcoa Corp said on Monday it would restart 35,000 metric tons a year of long-curtailed capacity at its Portland aluminum smelter in Australia, which will take operations at the plant to around 95% of capacity amid tight supply for the metal.

The process of restarting the capacity, idled since 2009, will begin immediately with metal output to start in the third quarter of 2022, Alcoa said.

“Restarting the idle capacity improves the smelter’s cost structure, competitiveness and longer term sustainability,” Alcoa Australia President Michael Gollschewski said in a statement.

Aluminum prices hit a 13-year high in October due to output restrictions in China, the world’s biggest producer. While off that high, prices remain elevated due to strong demand for the lightweight metal used in packaging and construction.

The Portland smelter, with total capacity of 358,000 tonnes a year, earlier this year won government aid to remain open for five more years after Alcoa threatened to close it in a drive to cut costs and carbon emissions.

The plant is the biggest single power user in the state of Victoria and lined up a cheap power deal with AGL Energy , Origin Energy and Alinta Energy as part of the lifeline agreed in March.

AGL Ltd, which used to be the exclusive supplier to the plant, said on Monday it agreed to supply 72 megawatts of extra power for four years, beginning in July 2022, for the capacity being brought back online.

The restart is expected to cost about $28 million, split between the smelter’s co-owners — Alcoa, Australia’s Alumina Ltd, and arms of CITIC Resources and Japan’s Marubeni Corp.

(By Sonali Paul; Editing by Richard Pullin)


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