Alcoa Portland Aluminium Smelting Plant

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Treasury documents from December 2016 reveal internal deliberations over government assistance to keep the Alcoa Portland aluminium smelter operating. The smelter faced a five-and-a-half-hour electricity disruption and rising power costs of $50–90 million following removal of a Victorian government subsidy and a new AGL contract. Treasury assessed that proposed assistance—including potential waiver of $40 million in transmission charges over 4.5 years and a $30 million government payment—would extend operations by only 4–5 years. The Department of Industry justified this short-term strategy as allowing Alcoa time to transition to renewable energy. Internal disagreement emerged over whether the $30 million should be structured as a grant (government preference) or a forgivable loan (Alcoa preference), with Treasury questioning Alcoa's tax deduction claim on interest from a loan it expected never to repay. The smel