Victorian Smelter, Jobs to Power on With $76 Million From Government

March 18, 2021 Updated: March 19, 2021

Hundreds of jobs will be saved at an aluminum smelter in Victoria thanks to a $76 million government deal to secure its electricity supply, which consists of renewable energy.

Prime Minister Scott Morrison confirmed the underwriting commitment, with the public money to be spent over four years.

Under the deal, AGL, Alinta, and Origin will supply power for the Alcoa smelter so it can remain open for at least another five years.

“We’re very committed to ensuring Australia has a future in heavy industry, making things here in Australia, whether it be aluminum or steel or whatever it happens to be and how it works into our advanced manufacturing industries right across the country,” Morrison said in Portland on Friday.

“The other big challenge we’ve got is we’ve got to keep the lights on. That means we need reliable energy to drive our industries but also to keep our cities’ lights on as well.”

Alcoa’s arrangement with the government is built on the understanding the smelter provides stability to the electricity market, because it uses a lot of power.

The smelter will be able to reduce how much power it uses during times when the electricity grid is under stress, such as at the height of summer when scores of air conditioners are keeping households cool.

More than 30 per cent of the smelter’s electricity is from renewable sources, which is expected to increase as the state works towards its 50 per cent renewables target.

The smelter is Portland’s biggest employer with about 600 workers and contractors.

According to its website, the smelter produces approximately 19 percent of Australia’s aluminium.

Victorian Treasurer Tim Pallas said the state would work with the company to sign all the final paperwork.

“We look forward to continuing to work with Alcoa and the Commonwealth in finalising the agreement and securing this valuable asset for the Great South Coast region and all of Victoria.”

Alcoa Australia president Michael Gollschewski has thanked employees and contractors for hanging in.

“After a year characterised by uncertainty we are delighted to have clarity on the smelter’s power supply,” he said.