The Australian and Victorian Governments have agreed to invest in the restructure of Alcoa‘s Point Henry aluminium smelter in Geelong, providing more than $40 million in assistance. The investment will go towards assisting the long term future of the plant and supporting more than 500 local jobs.
The company announced it expects to operate the Point Henry aluminium smelter until at least mid 2014. Using the assistance as an investment in the efficiency of Point Henry, through workforce skills and training, capital expenditure and activities that will contribute to the competitiveness of the smelter.
Alan Cransberg, Alcoa of Australia Managing Director said the future of the smelter in Geelong, Victoria, has been under review since February due to difficult economic conditions for the aluminium smelting industry in Australia.
“When the review was announced, the Point Henry smelter was facing substantial losses. Since then global market conditions, such as exchange rates and the aluminium price, have made the situation worse,” he said.
Minister for Industry and Innovation, Greg Combet, said the $40 million in Federal funding recognised these challenges in the aluminium sector.
“The aluminium industry is under significant pressure due to a substantial decline in world aluminium prices and the high value of the Australian dollar,” Mr Combet said.
“Together with the Victorian Government, the Australian Government will provide strategic support to Alcoa so it can restructure its Point Henry operations and help put them on a sustainable footing for the future.
“This assistance is aimed at ensuring the Point Henry smelter’s commercial viability and avoiding dislocation to the local community from the loss of more than 500 direct jobs and hundreds more indirect jobs if the smelter were to close,” he said.
Premier Ted Baillieu said the joint assistance package by the Australian And Victorian Government will secure jobs at the Point Henry Smelter, while stimulating growth in the wider Geelong business community.
Mr Baillieu said the Victorian Coalition Government was also focused on supporting the Alcoa supply chain, contractors and helping manufacturers diversify, transition and expand. “On top of the support we will provide directly to Alcoa, the Coalition Government will also provide a further $4 million to a fund which will be administered by the Victorian Government and run in a similar way to the Geelong Industry and Innovation Fund.” Mr Baillieu said.
Alcoa remains confident of continuing strong demand for aluminium in the long term.
Mr Cransberg believes the announcement is a positive outcome for employees, their families and the local community.
The Point Henry operations put over $300 million a year into the Australian economy, including over $100 million into Geelong and surrounding areas through wages, salaries and the purchase of goods and services.