Alcoa closing aluminum capacity in Australia

The aluminum firm Alcoa has announced plans to permanently close its aluminum smelter and two rolling mills in Australia. Alcoa’s smelter and an adjacent rolling mill are located in Geelong, Victoria, Australia. The second rolling mill and a recycling center, which also will be closed, are located in Yennora, New South Wales, Australia.

The company will close the aluminum smelter in August and the rolling mills will be shuttered by the end of 2014.

Alcoa says that its Point Henry aluminum smelter was placed under strategic review in early 2012 due to the high cost of production at the facility. The company says that a comprehensive review found that the 50-year-old smelter has no prospect of becoming financially viable. The two rolling mills serve the domestic and Asian can sheet markets, which have been impacted by excess capacity. Combined, the smelter and rolling mills employ close to 1,000 people.

“We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition,” says Klaus Kleinfeld, Alcoa’s chairman and CEO. “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 company adds that it will look to find a buyer for its Anglesea coal mine and power station that currently supplies about 40 percent of the power needs for the Point Henry smelter. Alcoa says the mine and power station can operate as a stand-alone facility after the smelter closes.

The closures will reduce Alcoa’s global smelting capacity by 190,000 metric tons and reduce Alcoa’s annual can sheet capacity by 200,000 metric tons. Including the closure of the Point Henry smelter, Alcoa has announced closures or curtailments representing 551,000 metric tons of smelting capacity, exceeding the 460,000 metric tons placed under review in May 2013. Once the Point Henry closure is complete, Alcoa will have total smelting operating capacity of about 3.7 million metric tons, with about 655,000 metric tons, or 17 percent, of high cost capacity offline.