AN INTERNATIONAL review of Alcoa assets has sparked fears the company could close its Portland aluminium smelter.
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The uncertainty has led Glenelg Shire mayor Anita Rank to quell concerns for the region, which she said had been "diversifying" to absorb any shutdown.
United States-based Alcoa announced a portfolio review on Wednesday that it said would "pursue non-core asset sales" worth up to $1 billion in the next 12 to 18 months.
Alcoa also said in the next five years it would realign its portfolio, and had placed its smelting and alumina refining capacity under review, which could include "improvement, potential curtailments, closures or divestitures".
The announcement cast doubt over the future of the Portland smelter, which employs 460 direct employees and about 190 contractors.
But the plant is now operating at 85 per cent capacity, back to the same levels it was operating at before a power outage in late 2016.
A four-year federal-state power contract was struck for the site in January 2017 and is due to expire in mid-2021.
The company did not name assets it planned to sell and a spokeswoman said "Alcoa's goal remains to secure a long-term future for the Portland aluminium smelter".
Cr Rank said the region had to plan "independently" for the future.
"There is no actual announcement related to Portland Aluminium," she said. "Having said that, we can't wait around and we need to act independently to ensure our community and shire is sustainable moving into the future."
Cr Rank said the manufacturing, renewable energy, agriculture and aquaculture sectors were all strong in the Portland district.
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South West Coast MP Roma Britnell said the smelter was "an integral part of the south-west's economy" and had she urged the government ensure it remained.
"The policies of the Andrews Labor government have forced electricity prices sky high, and placed enormous pressure on the business," she said.
"Daniel Andrews can't sit on his hands, he must act and support Alcoa to make the Portland smelter is sustainable."
Former independent Legislative Council member for Western Victoria James Purcell said he had negotiated with treasurer Tim Pallas in 2017 for a review worth $500,000 to investigate diversifying the smelter's energy sources.
"Alcoa would have a mix for energy, that could be wind farms in NSW or somewhere, that would be swapped for energy they use in the factory," he said.
"We progressed to a stage where Alcoa were comfortable they felt when a new agreement was signed, they were in a position where they could find enough energy at the right price to make it more viable."
The state government declined to answer questions, instead saying "this is a matter for Alcoa".
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