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UPDATE 1-Alcoa assessing impact of Portland smelter outage, says faces challenges

Published 05/12/2016, 01:00 pm
Updated 05/12/2016, 01:10 pm
© Reuters.  UPDATE 1-Alcoa assessing impact of Portland smelter outage, says faces challenges
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MELBOURNE, Dec 5 (Reuters) - Aluminium maker Alcoa (NYSE:AA) Corp AA.N said on Monday it was assessing the impact of a power outage last week at its Portland smelter in Australia that forced it to halt a potline, adding that it was facing 'substantial challenges'.

The smelter was hit when a power interconnector between the states of Victoria and South Australia went down on Thursday, knocking out power to both of the plant's potlines for about five-and-a-half hours. are now beginning to assess the operational impact of the outage and, given the significance of this event, we have substantial challenges and analysis ahead of us. As that work is completed, we will provide an update," Alcoa said in a statement.

Speculation has grown about the future of the Portland smelter after a recent rise in electricity prices added to pressure from a years-long glut in the global aluminium market.

A long power outage can cause molten aluminium to solidify in the potline's cells, from which it has to be chiselled out. The blackout also disrupted production at a second potline, although a portion of it was still operating, Alcoa said. A spokesman declined to give further details.

Analysts said the power outage could further jeopardise the future of the smelter, given the expense and time required to restart damaged potlines. An Alcoa spokesman said at the time that the company was not speculating about the future of the plant.

The smelter, co-owned by Alcoa, CITIC Resources 0267.HK and an arm of Marubeni Corp 8002.T, produces about 300,000 tonnes of aluminium a year.

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