Rebooting Australian Aluminium

The Economic, Social and Environmental Potential of the Portland Smelter
by Jim Stanford

A new report from the Centre for Future Work highlights the continuing economic importance of Alcan’s aluminium smelter in Portland, VIC, and discusses the potential of new renewable energy technologies to underpin the facility’s rejuvenation and long-term viability.

The report updates previous research by the Centre on the far-reaching impacts of the facility for employment, incomes, exports, and tax revenues. It also identifies the growing capability of renewable power sources to support heavy industrial activities like smelting.

Main findings of the report include:

  • The closure of Portland would reduce Australian national GDP by $800 million, exports by $840 million, household incomes by $250 million, Commonwealth government revenues by $192 million, and Victoria state government revenues by $50 million. (All figures annual.)
  • A total of 3600 direct and indirect jobs would be lost as a result of the facility’s closure – with the economy of southwestern Victoria suffering the worst blow.
  • Rapid developments in renewable energy technology could significantly improve both the cost and the reliability of electricity supply to the Portland smelter. Already renewable energy enjoys a 30% saving in levelised costs compared to coal (which currently powers the majority of Portland’s consumption). That advantage will widen in future years, driven by falling costs for both renewable generation and storage.
  • Global businesses, including top-tier manufacturers which purchase aluminium and aluminium components, are increasingly demanding high sustainable production standards from all of their suppliers – including aluminium ingots and components. Australia’s endowment of renewable energy resources gives us a major head start in responding to this trend.
  • In addition to renewable power sources, new technologies can also allow aluminium smelters to operate with significantly lower power inputs for several hours at a time, on relatively frequent occasions, without damaging capital equipment. This ‘frequent demand response’ technology effectively allows the smelter to act as a huge battery for the electricity system, and could even generate significant incremental revenue for the smelter (supplementing sales from aluminium production).

Reinvesting in the Portland facility, including in a secure and sustainable electricity supply, holds the potential to lead a broader revitalisation of aluminium manufacturing in Australia, and contribute to advances in sustainable manufacturing.

The update was commissioned by the Australian Workers Union.

Full report