Portland smelter saved with $160m deal

Prime Minister Scott Morrison announced the energy deal and government subsidies at the smelter on Friday morning.

Mr Morrison said it was an important day.

"It's a very important day for south-west Victoria and an even bigger day for Victorians because of the impact this has ensuring we keep the lights on," he said.

"It's an even bigger day for regional Australia because of what's being demonstrated here, our commitment to heavy industry, whether it's here in Portland, up in Gladstone or in the Hunter in New South Wales or any other parts of the country.

"We're committed to ensuring we keep the jobs and grow the jobs in the region and that heavy industry has a big future.

"What we have done here today in an energy partnership, some $76 million over the next four years to ensure we have a viable, competitive aluminium smelting operation here in Portland.

"That goal, vision and objective we share with the Victorian Government."

Mr Morrison said Portland Aluminium had done "some of the heavy lifting" reviewing its practices to come up with annual efficiencies of $30 million a year.

"Everyone has come together, this is how you secure heavy industries in regional Australia, governments working with industries on the ground and energy companies have made their contribution," he said.

The state and federal governments have both tipped in $80 million over four years and a five-year power supply deals with three energy companies has been struck.

The smelter is Portland's largest employer and injects more than $100 million into the region every year.

Victorian government treasurer Tim Pallas was at the announcement on Friday morning.

"We backed Portland workers four years ago and we're still backing them today - because every single regional job matters to a Victorian family and they matter to us," he said.

"We look forward to continuing to work with Alcoa and the Commonwealth in finalising the agreement and securing this valuable asset for the Great South Coast region and all of Victoria."

Minister for Energy, Environment and Climate Change Lily D'Ambrosio said the announcement was important for workers, the Portland community, Victoria's energy system and the National Energy Market.

"In our post-coronavirus recovery, we continue to support business, industry and the regions, and today's announcement is a clear demonstration of this," she said.

The Australian Aluminium Council's executive director Marghanita Johnson welcomed the announcement.

"This is welcome news for the thousands of employees, contractors and suppliers across Western Victoria who depend on the smelter for their livelihoods," she said.

"The announcement is a first of its kind "multi-party" contract with generators which demonstrates the value that the electricity market sees in large users like smelters which provide critical, stable demand all day, every day - as well as providing a shock absorber to the electricity system when required.

"Today's milestone shows that a collective effort is needed ensure Australia's world class energy resources once again provide internationally competitive, reliable energy to the manufacturing sector.

"There is a real opportunity on the horizon which could see Australia's manufacturing industry, like aluminium smelters, thrive in an increasingly low emissions power grid. Today is one important step forward in ensuring existing industry is part of this transition."

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