News | 2nd Mar, 2010

Alcoa deal will secure jobs: Brumby

Tuesday, 2 March 2010
Brisbane Times

A deal to continue the operations of Alcoa's controversial aluminium smelters for another 20 years secures jobs for Victorians, Victorian Premier John Brumby says.

But environment groups have condemned the agreement, saying that in a time of climate change it is insane to power aluminum smelters with brown coal.

Alcoa has signed contracts with generator Loy Yang Power for smelters at Portland and Point Henry, near Geelong, until 2036.

The existing power contracts expire in 2016 and 2014.

After decades of subsidising cheap power, the Victorian government is not involved in the deal and the subsidies will end in 2016.

Mr Brumby said he was unaware of the cost or arrangements of the new deal.

"I think, importantly, it secures jobs for our state, in Geelong and at Portland," he told Fairfax Radio.

Mr Brumby also welcomed a carbon reduction agreement between Alcoa and Loy Yang.

But Environment Victoria campaigns director Mark Wakeham said the agreement was only meaningful if it guaranteed electricity from a source other than coal.

"If Alcoa was serious about providing regional jobs it would be buying wind power from new projects in south-western Victoria and supplementing it with gas-fired power from the nearby Mortlake power station currently under construction and solar thermal power," he said.

"In a time of climate change it is insane to power aluminum smelters with brown coal.

"Locking this behaviour in `til 2036 defies belief. If power stations like Loy Yang are still operating in 2036, it will be all over for the climate."

Greenpeace said the deal was risky business as any carbon tax would make it the most expensive fossil fuels.

"Its workers should be suspicious of a deal that looks as economically viable as selling sand in a desert," Greenpeace climate campaigner Julien Vincent said.