Alcoa has announced a review into the future viability of its Point Henry aluminium smelter in Geelong.
According to the company "the current global economic conditions are severely impacting the aluminium industry, with various companies, including Aloca, announcing the review, closure, or curtailment of smelters in Australia and overseas".
To date Norsk Hydro has slashed jobs at its Kurri Kurri smelter in NSW and Rio Tinto has announced the wholesale divestment of its Australian and New Zealand aluminium assets as they no longer ‘aligned’ with the company strategy.
The divested assets included the Gove Bauxite mine and alumina refinery; the Boyne smelters and the Gladstone Power Station; the Tomago smelter; and the Bell Bay smelter, while in New Zealand it will divest the New Zealand aluminium smelters.
AWU national secretary Paul Howes said nearly 5000 workers were employed in Rio’s five Australian facilities.
Xstrata has also announced plans to shut its copper smelting and refining operations in Townsville and Mount Isa.
Aloca cited similar hurdles to Norsk and Rio, Alan Cransberg, Alcoa of Australia’s managing director, stating that "a combination of factors, including metals prices, input costs and exchange rates have resulted in the Point Henry smelter becoming unprofitable.
"The current situation makes it difficult for Point Henry to be globally competitive in the foreseeable future.
While the company’s goal is continued operation, it admitted that cutting production at Point Henry is a possible outcome of the review.
"I know this is unsettling news that creates uncertainty for our employees and the many people that depend on the smelter for their livelihood," Cransberg said.
"We will do all we can to ensure the smelter is competitive.
Alcoa is aiming to complete the review by the end of June, and come to a decision based on its recommendations.
Cransberg added that the review was not prompted by the upcoming carbon tax, which would be an additional cost on top of low metal prices and a high Australian dollar for a smelter that is already losing money.
The aluminium rolling mill at Point Henry and the Anglesea power station will not be included in the review.