Alcoa announced Friday immediate plans to begin work on restarting aluminum smelting capacity at its Portland unit in Victoria, Australia, that had been curtailed since a power outage last December.
"Restoring the curtailed production is expected to take approximately six months," Alcoa said.
Prior to the power outage, the smelter had been operating at about 85% of its nameplate capacity of 385,000 mt/year since 2009, due to weak market conditions. Its output rate was slashed further to 25% to 30% of capacity from December 1, 2016.
In addition, Alcoa announced Friday reaching four-year agreements with energy provider AGL, and the state and federal governments, that "will better position Portland Aluminium against market fluctuations and help maintain more than 500 jobs at the smelter."
"Today's government and energy agreements will help make the Portland smelter more resilient against market volatility, maintain hundreds of jobs and provide a bridge to a potential long-term energy solution," Chief Executive Officer Roy Harvey said.
The plant's future had been uncertain since the expiry of a 32-year power contract last November, leaving the unit exposed to higher transmission costs plus power prices that are not linked to the global aluminum price.
Alcoa said last October, "with persistently low aluminum prices, this adds significant pressure to the viability of the smelter."
The smelter is an unincorporated joint venture between Alcoa of Australia (55%) which manages its operations, Citic (22.5%) and Marubeni (22.5%).
All of the aluminum produced at the Portland smelter is exported to Asia. The plant uses alumina from Alcoa's refineries in Western Australia.
Alcoa has said the power outage at Portland was not expected to significantly impact the group's fourth-quarter results.
