PERTH (miningweekly.com) – Aluminium major Alcoa will restart full operations at its Portland smelter, in Victoria, after striking a deal with state and federal governments, and finalising a new four-year power supply agreement with ASX-listed AGL Energy.

It is understood that the Victorian government will invest some A$200-million to ensure that the Portland plant remains operational for the next four years, with the federal government expected to contribute a further A$30-million.

“We promised Portland workers we would leave no stone unturned in our efforts to keep the smelter open – and we have delivered certainty to thousands of local workers and their families,” Victorian Premier Daniel Andrews said on Friday.

In addition to employing about 650 staff and contractors, the smelter injects more than A$120-million a year into the Portland region, and delivers about A$386-million of broader economic benefit.

“The Victorian state and Australian federal governments are strong proponents of the Portland aluminium smelter, our employees, their families and the broader Portland community, and we thank them for their unwavering support,” said Alcoa CEO Roy Harvey.

In addition to the deal struck with these governments, Alcoa has also inked a power supply agreement with AGL Energy, which will take effect from August, and will see some 510 MW of electricity supplied to the smelter, the equivalent of about 10% of Victoria’s total electricity load.

Harvey said that the government and energy agreements would help make the Portland smelter more resilient against market volatility.

Alcoa will immediately begin work to restart smelting capacity that was lost owing to the fault on the Victorian transmission network in December, which caused a five-hour power outage at the smelter.

Restoring the curtailed production is expected to take about six months. Prior to the electrical fault, the smelter had been operating at nearly 85% of its nameplate capacity of 385 000 t/y.