Aluminium price hike not enough to save smelter jobs

WHILE the aluminium price climbed to a 20-month peak this week, Boyne Smelter Limited is determining the extent of production and job cuts due to electricity costs.

The price increase, which has the metal commodity at its highest since May 2015, comes after the Rio Tinto owned BSL, announced it would cut 45,000 tonnes from its annual production.

Yesterday the three-month aluminium price on the London Metal Exchange closed with a 1% gain at $US1867 a tonne.

The price increase, that's seen a rise from $US1717 on January 9, was prompted by a potential drop in production by the world's largest aluminium producer, China. But it will give little security for the workers and managers at BSL.

This week general manager Joe Rea and smelter owners Rio Tinto were establishing how far production and job cuts would go.

Mr Rea said the aluminium price made it difficult for Australian smelters to perform well on the global market.

Australia and New Zealand produce 2.1 million tonnes each year, while China produces in excess of 30 million tonnes of aluminium.

Boyne Smelters general manager operations Joe Rea announced job cuts due to increased power prices.
Boyne Smelters general manager operations Joe Rea announced job cuts due to increased power prices. Mike Richards GLA200117bsljobs

"The price of aluminium globally has plummeted over the past seven years," Mr Rea told The Observer earlier this year.

"The average price between 1995 and 2008 was $3420US a tonne."

Traders cited a Bloomberg story saying that China is drawing up plans that would halt about 3.3 million tonnes of operational aluminium capacity, during the winter, to combat air pollution.

It comes after China's top environment watchdog delivered verbal warnings in December to Chalco, the nation's top aluminium producer, for failing to deal with pollution appropriately, state news agency Xinhua has reported.

Last week BSL announced it would take 40 aluminium-producing cells out of circuit after it couldn't secure a "globally competitive" electricity deal for the next 12 months.

"The global aluminium price has remained flat over the past six years but power prices have risen 260% in that time," Mr Rea said. "If nothing changes in the Queensland electricity market these 40 cells will stay out for the year, resulting in 45,000 tonnes less aluminium produced."

It was announced jobs would be lost at BSL, but how many is still unknown.



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