Photo by: Bloomberg
PERTH (miningweekly.com) – The future of the Portland aluminum smelter, in Victoria, has been secured until 2026, following agreements with multiple power generators.
US major Alcoa on Friday said five-year agreements struck with AGL, Alinta Energy and Origin will each commence August 1, 2021, when an existing agreement with AGL expires on July 31, 2021.
Australian Prime Minister Scott Morrison said that the new agreements would keep the smelter operational until 2026 and would protect around 500 jobs, along with several others in the region that rely on the plant’s continued operation.
It is estimated that the smelter accounts for some 14% of the jobs in the Portland area.
In December of last year, the federal government offered Alcoa a A$76.8-million commitment over a four-year period to support the Portland aluminium smelter. Under the agreement, the Alcoa-operated facility will reduce its energy demand at peak times, making more electricity available to the grid and helping Victoria avoid blackouts.
The Portland facility represents around 10% of Victoria’s electricity demand each year and produces almost 20% of Australia’s aluminium output.
“Our support means keeping jobs and keeping the lights on. This demonstrates the real confidence that industry, manufacturers and businesses have in Australia as we emerge from Covid-19,” the Prime Minister said.
“The government’s support for Portland recognises its important position, not just as a large employer and key manufacturer, but also for its vital role in keeping the lights on in Victoria.
“The number one focus of my government’s National Economic Recovery Plan is jobs, and with Australia having restored the jobs lost during the Covid-19 recession, every one of our policies is focused on securing jobs like those at Portland and creating new ones.”
Minister for Energy and Emissions Reduction Angus Taylor said the agreement between the Commonwealth and Alcoa recognised the smelter’s important role in helping to stabilise the state’s electricity network and the jobs it supports.
“The Portland smelter is Victoria’s largest energy consumer, and provides unique and valuable energy services to the grid,” Taylor said.
“Securing its ongoing role will help Victoria keep the lights on during times of high demand, such as days of extremely hot weather and help Portland to be appropriately compensated for the grid services it provides.”
Alcoa president and CEO Roy Harvey said that the company was looking forward to finalising the agreements with both the federal and state governments, underscoring the smelter’s importance to the economy and the vital role it plays in securing Victoria’s energy grid.
Currently, more than 30% of the smelter’s consumed electricity is derived from renewable sources, including electricity from a nearby wind farm. This figure is expected to grow with implementation of the Victorian renewable energy target that aims to reach 50% renewables by 2030.