Alcoa claims carbon tax could cost $40 million and Portland jobs

　　ALCOA has warned a carbon tax is among several threats to the future viability of its Victorian smelters.

　　The company employs about 1200 people state-wide, with the workforce split between Portland Aluminium and the Point Henry smelter near Geelong.

　　Its general manager of climate strategy and federal government relations, Tim McAuliffe, told a Senate select committee inquiry into carbon tax pricing mechanisms that Alcoa faced extra costs of $40 million per year if the tax was introduced.

　　A $9.2 billion assistance package to help the manufacturing sector adjust to a carbon price assumes companies will have to pay for one tonne of carbon per megawatt hour of electricity (MWh) used.

　　Mr McAuliffe said Alcoa expected to pay for 1.25 tonnes of carbon for each MWh as part of new contracts with Loy Yang Power.

　　"It is correct to say that the combination of the above situation, adverse foreign exchange and high input costs are a significant threat to the future viability of both the Victorian aluminium smelters," he told the Senate committee.

　　South West Coast MP Denis Napthine said the federal government needed to reconsider the assistance available to Victorian industries heavily dependent on brown coal-fired electricity.

　　"If Alcoa pulled out of Portland it would be absolutely devastating for that community," he said, adding that Portland Aluminium had been a strong corporate citizen.

　　Dr Napthine said he was aware of job loss fears among the 600-strong smelter workforce and associated contractors.

　　"The last thing Portland Aluminium needs is extra lead in their saddle-bags when they're competing against industries overseas," he said.

　　"(Workers) are frustrated and angry that the future of Portland Aluminium could be jeopardised by this carbon tax."

　　Alcoa's Victorian manufacturing operations general manager John Osborne said the company was focused on overcoming its challenges.

　　"Aluminium smelting is a cyclical business and in over 40 years of operation in Victoria, Alcoa has faced significant challenges before," he said.