Alcoa has announced that it will permanently close down its Point Henry aluminum smelter and rolling mill in Geelong come August after a comprehensive review found that the 50-year old facility has no prospect of becoming financially viable.
The metals manufacturer has also decided to close its second rolling mill and recycling facility located in New South Wales by the end of 2014. In January Alcoa made it clear that they are not seeking additional state or federal aid for the smelter, even if the Labor government gave them $40 million in assistance in 2012 to keep the Geelong plant operational.
The Point Henry smelter, which is operated by Alcoa of Australia, employs about 500 people while the rolling mills which are operated by Alcoa Inc. employ about 480.
“We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition,” said Chairman and Chief Executive Officer Klaus Kleinfeld in a statement.
“Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future.”
The Point Henry smelter was placed under strategic review in February 2012 due to challenging market conditions. The closures will reduce Alcoa’s global smelting capacity by 190,000 metric tons and reduce Alcoa’s can sheet capacity by 200,000 metric tons.
The company has also announced curtailments representing 551,000 metric tons of smelting capacity, exceeding the 460,000 metric tons placed under review in May 2013. Upon completion of the Point Henry closure, Alcoa will have total smelting operating capacity of approximately 3,760,000 metric tons.
Alcoa of Australia Managing Director Alan Cransberg said they appreciate the ongoing support of the Australian and Victorian governments and will continue to work closely with all levels of government, their employees, unions and community stakeholders to manage through these changes.
The Portland Aluminum smelter in Victoria will continue normal operations, as will Alcoa of Australia’s bauxite mining and alumina refining operations in Western Australia.