PERTH (miningweekly.com) - Aluminium major Alcoa would be reviewing the viability of the Point Henry aluminium smelter, in Victoria, as global economic conditions continued to deteriorate.

The miner said on Wednesday that the current global economic conditions were severely impacting the aluminium industry, with various companies, including Alcoa, announcing the review, closure or curtailment of smelters in Australia and overseas.

“A combination of factors, including metal prices, input costs and exchange rates, have resulted in the Point Henry smelter becoming unprofitable,” said Alcoa’s Australian MD Alan Cransberg.

“Together with our employees, we have worked hard to minimise costs and improve margins, but the current situation makes it difficult for Point Henry to be globally competitive in the foreseeable future.”

Cransberg said that Alcoa’s goal was for Point Henry to continue operating and meet its profitability targets. However, he noted that one possible outcome of the review was that production at Point Henry could be curtailed.

“I know this is unsettling news that creates uncertainty for our employees and the many people that depend on the smelter for their livelihood.

“We will do all we can to ensure the smelter is competitive.”

Cransberg said that the review would likely be completed by the end of June, adding that a decision about the smelter’s future would be made at that time.

The associated aluminium rolling mill at Point Henry and Anglesea power station were not included in the review.

Meanwhile, Cransberg said it was important to note that the review had not been prompted by a future price on carbon.

“The present situation is a result of low metal prices, a high Australian dollar, and input costs. The future price on carbon would be an additional cost, however Point Henry smelter is already losing money,” he added.
 

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