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Fears crippled Alcoa plant in Portland may never reopen after power failure

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The far-west Victorian city of Portland is in shock after a catastrophic power failure plunged the future of its biggest employer, Alcoa, into jeopardy.

More than half the Portland Aluminium plant's smelting capacity has been seriously damaged as the company investigates what can be saved amid fears the plant may never reopen.

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Testing our metal: the Alcoa question

The Alcoa smelting plant has been an expensive project for the state government, and as electricity costs soar and international prices for aluminium fall, the future of the plant looks uncertain.

Alcoa - which is Victoria's largest single exporter - directly employs about 680 full-time staff and contractors at Portland, a city of only around 10,000 people. Around 2000 jobs rely on the operation.

The power supply to the huge complex went out for more than five hours on Wednesday night, causing molten aluminium in more than 200 smelting pots to cool and solidify.

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This crippled an entire "pot-line" in the smelter, which runs two such potlines to smelt aluminium.

The other has been working on limited capacity for some time, and had only about 100 pots operating. Alcoa has closed both operations as it works to stabilise the second pot line and investigates the damage to the first.

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The issue will place the Andrews government under further pressure to intervene to keep the plant operating, with concern about regional employment and the integrity of Victoria's energy supply ahead of the looming closure of the Hazelwood power station.

Industry Minister Wade Noonan said the government was in ongoing contact with Alcoa to determine the severity and potential impacts of the outage. Mr Noonan said the State government had also offered its support.

"Our main concern is the workers, Alcoa assures us there will be no impact on the workforce as a result of the outage," Mr Noonan said. "We will remain in close contact with Alcoa to understand what the impact will be on operations.

Alcoa's director of corporate affairs, Brian Doy, said the crisis could not have come at a worse time.

Alcoa is facing significantly higher operating costs as it negotiates a new electricity supply contract with AGL Loy Yang.

Its previous contract, negotiated with the state-owned SECV in the 1980s and considered one of the most generous industrial power-supply deals in the nation, wound up on October 31.

Mr Doy said Wednesday night's occurrence was "certainly the worst incident" at Portland Aluminium that he could recall.He said it was too early to predict what the future held, and whether or when the plant could be returned to production.

"No decisions can be made until investigations are complete," he said.

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Photo: Jessica Shapiro

Meanwhile, the workforce was being kept on to maintain and stabilise the plant.

The smelter normally has two high-voltage transmission lines supplying electricity, which runs for 500km from the Latrobe Valley.

This ensures there is a back-up if one of the lines fails.But on Wednesday night, the electricity network company Ausnet took down power to one of the lines to undertake routine maintenance work, Fairfax media understands.

While that was taking place, the other line failed.This not only crippled Alcoa, but tripped the grid's interconnector at Heywood, near Portland, which runs electricity to South Australia, which otherwise relies on windpower.

Around 200,000 properties in South Australia were "browned out", and power was cut to BHP's Olympic Dam mine.

Glenelg Shire mayor Anita Rank told ABC radio the company had assured her it was working around the clock to restore power.

"Council is aware of the uncertainty that this event is causing employees and the Portland community, but we remain optimistic that this problem can be resolved promptly," she said.

"Portland Aluminium is Victoria's single largest exporter. It is paramount that business can return to normal as soon as possible.

"The Member for South West Coast, Roma Britnell, said she understood it was the first time in the plant's 30-year history that power had failed.

"This interruption is completely unacceptable," she said."Its cause must be fully investigated and the state government must help Alcoa get the plant back into full operation."

With Josh Gordon

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