Alcoa Inc — the third-largest producer of aluminium in the world — has announced plans to close three facilities in Australia: the 50-year-old Point Henry aluminium smelter at Geelong in Victoria and two rolling mills (one in Victoria and one in New South Wales). They will close by the end of the year, at a cost of almost 1,000 jobs. In addition, a coal mine and power station supplying about 40% of Point Henry’s power will be put up for sale.
According to Credit Suisse analyst Matthew Hope in Sydney, the smelter is “a small operation that doesn’t use modern technology and can’t be upgraded. You’d have to re-build the entire smelter, and they don’t want to do that — particularly in Australia.”
A spokesman for Alcoa, which has its corporate headquarters in New York City, said: “Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable — today or in the future.” He added that the closures will cost Alcoa up to £161 million in restructuring charges and will reduce its global smelting capacity by 190,000 tonnes (to 3.7 million). It will continue to operate a smelter in Portland, Victoria; it also owns bauxite-mining and alumina-refining operations in the country.
Alcoa is currently building the world’s lowest-cost smelter in Saudi Arabia, in a joint venture with the Saudi Arabian Mining Co. Since last May, it has curtailed or closed 551,000 tonnes of capacity at higher-cost plants in Europe and the USA.