SYDNEY/MELBOURNE Jan 9 The Australian
government has offered "substantial" financial support to help
repair Alcoa Corp's aluminium smelter in Victoria that was
crippled last month by a state-wide blackout, government
ministers said on Monday.
The outage, which caused molten aluminium to solidify,
disrupted some production at the 300,000-tonnes-per-year
Portland smelter and raised questions about the facility's
The ongoing negotiations between Australia's government,
energy provider AGL Energy, and Alcoa suggest
the smelter may eventually resume full production.
"The state's substantial support is aimed at keeping the
smelter open and sustainable into the future," state minister
Philip Dalidakis in a statement.
The government had offered "significant, immediate financial
support" as well as the potential for further assistance through
Australia's Clean Energy Finance Corporation, a government-owned
bank that invests in renewables, to provide longer-term energy
security, said a spokesman for federal minister Greg Hunt.
Both ministers declined to comment on the scale of financial
support because negotiations were confidential, but Australia's
Fairfax Media reported that Alcoa received an offer of A$240
million ($175.63 million), comprised of $200 million in state
funds over four years and a $40 million interest-free loan from
A spokesman for Alcoa also declined to comment on the
negotiations, saying only that the plant continued to operate at
a reduced capacity.
To seal the deal, pressure is now on AGL Energy to agree to
provide cheaper power to the plant as a result of the
government's financial support.
A spokeswoman for the energy firm said discussions with
Alcoa were ongoing.
James Purcell, the member of the state parliament for
Western Victoria, said an announcement could be made on Friday
if a power supply deal can be reached.
"Everyone is working to ensure that the smelter remains
open," Dan Tehan, federal member of parliament for the district
which includes Portland, told Reuters.
Tehan said federal assistance to Alcoa was justifiable in
the wake of the power outage that damaged the smelter.
"In my view, such an event warrants the government looking
at ways it can assist the smelter to get back on its feet and
continue operations," he said.
"It is critically important to the local economy that we get
the smelter back up and running at full production."
($1 = 1.3665 Australian dollars)
(Reporting by Melanie Burton in Sydney and Sonali Paul in
Melbourne; Editing by Randy Fabi)