News

Smelter's competitiveness hurt as production is reduced

A graphic illustration of the amount of aluminium business that will be lost due to Boyne Smelter Ltd’s three-month production cutback at Gladstone.
A graphic illustration of the amount of aluminium business that will be lost due to Boyne Smelter Ltd’s three-month production cutback at Gladstone. Mara Pattison-Sowden

THESE aluminium ingots bound for Japan show the amount of aluminium business a competitor would take away from Queensland due to Boyne Smelter Ltd's three-month production cutback.

The smelter will be producing 14,000 tonnes less than usual from January to the end of March.

The decision to reduce aluminium production has stemmed from months of negotiations with Queensland electricity suppliers to try to secure a competitive price for 140mW of the smelter's electricity, which ended on December 31.

Workers' jobs will be safe during the cutback, as BSL managers decided natural attrition should deal with any required staff reductions.

Although production officially reduced on January 1, management said the process wasn't as simple as flicking a switch, nor was it cheap, but with the high price of Queensland power over the summer months it was still the most economic solution for BSL.

BSL general manager Joe Rea said workers had been scaling down production since mid-December.

"It's a very complex and expensive process and we've had a lot of employees working around the clock to ensure the smelter can achieve this safely," he said.

Mr Rea said it was a costly and time-consuming process that reduced the smelter's competitiveness on a global stage, but curtailing production was still the most economic solution.

"It is an ongoing concern for our business that electricity prices in Queensland are significantly higher than other states in Australia at a time when the price for aluminium in Australian dollar terms is 20% lower now than during the global financial crisis.

"Electricity prices in Queensland are currently 20% more expensive here than in New South Wales and 30% more expensive than in Victoria."

Mr Rea said he hoped the smelter could continue producing aluminium for BSL's joint-venture partners at a more competitive rate than what was available from the London Metal Exchange.

"We're confident we can come back up to full production (in April) but cutting back does concern the partners when we've just invested $750 million in the smelter," he said.

CUTTING BACK:

  • Production cells that have been cut out of the circuit early must be rebuilt prior to being put back into circuit.
  • Just over 60 reduction cells have been cut out of the circuit and the power consumption has been reduced on the rest of the cells.
  • Electricity has gone from the normal load of 950mW of consumption down to 870mW.
  • Ingots of aluminium are currently worth around (a fluctuating) US$1753 per tonne.

Topics:  aluminium, boyne smelter, electricity, industry, resources



'Loaded' hourly rates could replace penalty rates

PENALTY RATES: Workers could get more an hour to fore go weekend penalty rates.

DO YOU rely on penalty rates to make ends meet?

BREAKING: Gladstone man flees court

Police are looking for this man

33-year-old man wanted by police

Emergency services held up in woman's rail line 'sieges'

Police generic

Woman's late night antics puts Gladstone rail under 'siege'

Local Partners

Brad Pitt and Angelina Jolie 'working on custody agreement'

Brad Pitt and Angelina Jolie are thrashing out a custody agreement

10 of the worst wedding day disasters

Getting hitched without a hitch. That's the aim, right?

Trump's comments make light of statutory rape

Trevor Noah has gone to town on Donald Trump's sexism

Forza Horizon 3 review: Australia's never looked so good

Fancy racing a freight train?

Byron Bay, Gold Coast, Sunshine Coast, Twelve Apostles feature

Tommy goes home in emotional Bachelorette episode

The Bachelorette contestant Tommy Saggus.

BRISBANE bachelor hopes show will give him more confidence.

Beach-side real estate starts at $85k on Fraser Coast

HERVEY BAY REAL ESTATE: You can buy this townhouse in Scarness for under $300k.

Live your beach-living dream locally.

$40million hotel, shops development project for Mackay

Mt Pleasant hotel and retirement accommodation, proposed at 194-202 Malcomson St.

$40m development to take Mackay to 'the next level'

'Flex muscles': Gladstone suburb drops $120K

BUYERS are scooping unprecedented deals by “flexing their muscles at the table”

Few bright lights for property after mining downturn

The Gladstone Regional Council wants associated LNG companies like Bechtel to be apart of the EIS housing accommodation strategy from the outset of the projects and not mid-way through.

Tannum Sands continues to write its own property success story

Property 200m from ocean selling for just over $100K

BEACHCOMBER PARK: Work has started on a new $19.2 million development at Toogoom.

The estate's developer is offering huge discounts for early buyers.

UPDATE: Former rodeo champ's sale rained out, now back on

Larkhill local Ken Consiglio is having an auction of most of the things on his property.

'People kept showing up and we had to turn them away'