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Norsk Hydro to shutter Kurri Kurri smelter

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Norsk Hydro plans to shut down its 180,000-tpy Kurri Kurri aluminium plant in Australia after a review showed that the plant will not be profitable in the short term at current market prices of aluminium.

“The profitability of Hydro’s Kurri Kurri plant has suffered as a result of the continued weak macro-economic conditions, with low metal prices and an uncertain market outlook, as well as the strong Australian dollar,” the company said.

“The current cash losses are significant, with no sign of improvement anytime soon,” said Hilde Merete Aasheim, executive vp of Hydro’s primary metal business.

“We have therefore started to consult about full curtailment and will maintain a close dialogue with employees, unions and local stakeholders,” she said.

The Kurri Kurri plant has three pot lines with a total annual production capacity of 180,000 tonnes. In January, Hydro curtailed the plant’s No 1 potline, which was commissioned in 1969, by 60,000 tonnes, which resulted in the loss of 150 jobs.

The plant, located near Newcastle in New South Wales, employs 344 people and has a book value of about Norwegian Kroner 1.1 billion ($185 million).

Aluminium producers worldwide are struggling with lower prices and overcapacity, but the situation in Australia is made more challenging because of higher costs and the strength of the Australian dollar.

UC Rusal recently said it may cut 600,000 tpy of aluminium output from the second half of this year to cope with “continued uncertainty” in the global economy.

Alcoa is considering the future of its loss-making 190,000-tpy Port Henry aluminium smelter in Australia and will take a decision by end of June.

Shivani Singh
shivani.singh@euromoneyasia.com

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