The smelter and an adjacent rolling mill are located in Geelong, Victoria, and the second mill and a recycling facility are located in Yennora, New South Wales. The smelter will close in August and the rolling mills by the end of 2014.
The Point Henry smelter was placed under strategic review in February 2012 after which the company 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.
The smelter employs around 500 people, while the rolling mills employ about 480 people.
Financially unsustainable
“We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition,” said Alcoa chairman and CEO Klaus Kleinfeld. “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 Anglesea coal mine and power station that currently supplies approximately 40% of the power needs for the Point Henry smelter has the potential to operate as a stand-alone facility after the smelter closes. Alcoa of Australia will actively seek a buyer for the facility.
The Portland Aluminium smelter in Victoria will continue normal operations, as will Alcoa of Australia’s bauxite mining and alumina refining operations in Western Australia.
Capacity reduction
Total 2014 restructuring-related charges associated with the closures outlined above are expected to be between US$250 million and US$270 million after-tax and non-controlling interest. 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.
