AN already chill wind blowing through the aluminium industry became an icy blast in summer yesterday when Norsk Hydro announced 150 redundancies at its Kurri Kurri smelter and Tomago Aluminium - controlled by Rio Tinto with Hydro, CSR and AMP as junior partners - confirmed the impending loss of 100 positions.
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Both companies gave similar explanations of the challenges in front of them. Tomago Aluminium was looking to drive down costs after a year in which the world price of aluminium has fallen by nearly 30 per cent, from $US2800 a tonne in May to under $US2000 this month.
Hydro - which will cut its production by a third - blamed its woes on the price falls and the continued impact of the high Australian dollar, which drives down the value of sales transacted in $US.
Although the opposition blames the looming impacts of the carbon tax, Hydro specifically ruled it out as a cause yesterday. Similarly, it played down any impact of well-publicised problems in obtaining a new electricity contract.
Perhaps the opposition is correct, and the aluminium companies are being pressured by the government not to blame the carbon tax. But the carbon costs are in the future and Hydro is losing millions of dollars a year even before the legislation takes effect.
Unfortunately, unless the metal price and exchange rate parameters improve dramatically, the Hydro cuts may not be the last. The ageing smelter is already at the top of the cost curve and cutting its size can only take it further away from the economies of scale that make its new rivals more efficient.
The situation may not be as bleak at Tomago but its biggest shareholder, Rio Tinto, has its stake in the business up for sale along with the rest of its Alcan aluminium assets. It, too, appears to have little faith in the industry's long-term prospects.
Certainly, the aluminium smelters do not appear to be receiving as much attention as the car industry, with Ford this week reportedly receiving $34 million of taxpayer assistance in a $103 million bailout. With their jobs on the line, the Hunter's loyal aluminium workers must wish they had the pulling power of their automotive colleagues.
Glendale hopes
AT first glance, an announcement that the Glendale transport interchange is one of three projects put forward for funding under the federal government's Regional Development Australia infrastructure program should be something to cheer about.
Lake Macquarie City Council and the state government have put up $25 million and in a fair world the Commonwealth would match this amount dollar for dollar.
But late last year the Gillard government changed the funding parameters, meaning the maximum contribution from the infrastructure fund might be too little to make the project a reality.
Again, the speed with which Canberra races to the help of the car industry is at odds with the time it's taking to secure funding for Glendale.