Alcoa to restart long idled capacity at Australian aluminium smelter

Alumina

07/11/2021 23:21

MELBOURNE, Nov 8 (Reuters) - Alcoa Corp  AA.N  said on
Monday it would restart 35,000 metric tons a year of
long-curtailed capacity at its Portland aluminium smelter in
Australia, which will take operations at the plant to around 95%
of capacity amid tight supply for the metal.
    The process of restarting the capacity, idled since 2009,
will begin immediately with metal output to start in the third
quarter of 2022, Alcoa said.
    "Restarting the idle capacity improves the smelter's cost
structure, competitiveness and longer term sustainability," 
Alcoa Australia President Michael Gollschewski said in a
statement.
    Aluminium prices hit a 13-year high in October due to output
restrictions in China, the world's biggest producer. While off
that high, prices remain elevated due to strong demand for the
lightweight metal used in packaging and construction.
    The Portland smelter, with total capacity of 358,000 tonnes
a year, earlier this year won government aid to remain open https://www.reuters.com/article/us-alcoa-corp-deals-agl-energy-idUSKBN2BB05S
 for five more years after Alcoa threatened to close it in a
drive to cut costs and carbon emissions.
    The plant is the biggest single power user in the state of
Victoria and lined up a cheap power deal with AGL Energy
 AGL.AX , Origin Energy  ORG.AX  and Alinta Energy as part of
the lifeline agreed in March. 
    AGL Ltd  AGL.AX , which used to be the exclusive supplier to
the plant, said on Monday it agreed to supply 72 megawatts of
extra power for four years, beginning in July 2022, for the
capacity being brought back online.
    The restart is expected to cost about $28 million, split
between the smelter's co-owners -- Alcoa, Australia's Alumina
Ltd  ALU.AX , and arms of CITIC Resources  1205.HK  and Japan's
Marubeni Corp  8002.T .
    

 (Reporting by Sonali Paul; editing by Richard Pullin)
 ((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))