Power contracts for Portland aluminium smelter

Mr  PURCELL (Western Victoria) — The matter I raise is for the Minister for Energy and Resources. Power contracts for Alcoa's Portland aluminium smelter are up for renegotiation next year. The original Portland aluminium project was given approval in the 1980s, with power contracts put in place for the Portland and Point Henry smelters. The tariff paid by Alcoa increases and decreases depending on the price of aluminium, which is based on a price from the London Metal Exchange.

The contracts for Point Henry concluded in 2014, and the contracts for Portland will conclude next year, in 2016. Alcoa is currently reviewing its global operations and has indicated that Portland is not part of this review, but Alcoa is closing or selling 14 per cent of its global smelting operations due to the sluggish prices of raw aluminium and the oversupply from the global Chinese market.

The Portland smelter is one of Victoria's biggest exporters and provides 600 direct jobs in the Portland area. The multiplier effect of indirect jobs and also contractors would work into many thousands of jobs. The Point Henry smelter closed in August 2014, the same year its power contract ended, with over 500 jobs lost. Then the power station at Anglesea closed. It supplied 40 per cent of the power to the Point Henry smelter, and it was decommissioned with 85 jobs lost.

Portland is one of the most economically vulnerable towns in Australia, facing the progressive loss of industry and weak employment rates. It is vital that we keep industry here and that we find ways to encourage more industry to come. If we do not work to keep Portland as an attractive option, plenty of other countries will take Alcoa's business. The government must keep jobs and growth in western Victoria front of mind when negotiating favourable and successful power contracts for the Portland smelter next year.

I ask the minister to join me in meeting with the Alcoa management in Portland to discuss the new power contracts.