Hydro to Close Australian Aluminum Smelter

Norsk Hydro's Kurri Kurri plant.

The Norway-based aluminum and renewable energy company Norsk Hydro has announced plans to close down its aluminum plant in Kurri Kurri, Australia. The company had earlier closed one of the smelter’s pot lines in January 2012.

Hydro became owner of the Kurri Kurri aluminum plant through its acquisition of VAW Aluminium AG in 2002.

"Our Kurri Kurri workforce has worked intensively to improve the plant's cost position and no stone has been left unturned," says Hilde Merete Aasheim, executive vice president of Hydro's Primary Metal business area. "Despite extensive efforts to improve profitability, we are faced with a very challenging situation at Kurri Kurri."

According to Norsk Hydro, the profitability of the plant has suffered as a result of the continued weak macro-economic conditions, with low metal prices and an uncertain market outlook, as well as the strong Australian dollar.

The Kurri Kurri plant in Australia has three pot lines with a total annual production capacity of 180,000 metric tons.

In its decision to shutter the smelter, the company reviewed the operation and determined that the plant would not be profitable in the short term with current market prices, while long-term viability would be negatively affected by a number of factors including increasing energy costs and the carbon tax.

"The current cash losses are significant, with no sign of improvement anytime soon. We have therefore started to consult about full curtailment and will maintain a close dialogue with employees, unions and local stakeholders," says Aasheim.