Norsk Hydro to curtail one of three production lines, or 60,000 tonnes/year output, at its Kurri Kurri aluminum plant in Australia; decision due to weak macro-economic environment, low metal prices and relatively strong Australian dollar
January 18, 2012
– Norsk Hydro ASA has decided to curtail one of three production lines at its Kurri Kurri aluminium plant in Australia. The decision follows a consultation process with the local employees.
"Kurri Kurri is in a tough spot, and we need to take swift actions to reduce losses. Operation under current conditions is not sustainable. Curtailing one line gives some relief to the situation, but we need to consider whether this is enough," says Hilde Merete Aasheim, executive vice president of Hydro's Primary Metal business area.
Reducing production in Kurri Kurri will be done by curtailing potline 1, commissioned in 1969, representing an annual production of 60,000 metric tons. 150 jobs will consequently become redundant. The cost of curtailing potline 1 is estimated at approximately USD 20 million.
The process to curtail potline 1 will start shortly, and the production line is expected to be fully curtailed in 6-8 weeks.
The decision is a response to the weak macro-economic environment, with low metal prices and uncertain market outlook. In addition, Kurri Kurri is suffering from a strong Australian dollar relative to the US dollar.
Hydro remains confident that customer commitments will be served through its global metal products supply system.
Kurri Kurri, fully owned by Hydro, has three production lines with a total annual production capacity of 180,000 metric tons. The plant, located near Newcastle in New South Wales, employs around 500.