Portland Working Families Welcome Smelter Exclusion

STAND beneath the massive power lines that carry electricity to Portland's Alcoa aluminium smelter in far south-west Victoria and you can hear the energy crackling and sizzling in the air all around.

You could detect something else in the air around Portland yesterday, too: sighs of relief.

Here is a town more than four hours from Melbourne where the crisis facing the world's climate drives smack into the daily lives of those known to the Rudd Government as working families.

Portland's population is about 10,000. The aluminium smelter employs 650, plus 250 contractors, most of whom are paid twice the going rate available beyond the plant's gates. One-quarter of the district shire's rates are paid by Alcoa, and there is hardly a household or business in the region that doesn't rely on the aluminium industry in one way or another.

While green groups across Australia were expressing disbelief yesterday at the Government decision to give aluminium smelters free permits for up to 90% of the pollution they produce, residents of Portland were celebrating.

"If Alcoa had found itself uncompetitive internationally and was to close down here, the local economy would have been gutted," Cr Gilbert Wilson, acting Mayor of the Glenelg Shire, said.

He said it was "pie in the sky to imagine that the Government would make a decision that would close down an industry like this".

Just out of town, where the Alcoa smelter dominates the skyline on a headland jutting into the Southern Ocean, Peter King and his mates spent the morning contemplating the fate of a community that has come to rely overwhelmingly on the smelting and export of aluminium ingots.

Mr King, a local who is senior site steward for the Australian Workers Union at the smelter, recalled the dog days when Portland's meatworks, Thomas Borthwick and Sons - then the town's biggest employer - closed a couple of decades ago.

"There was a saying going around then that the last person out of town should turn the lights off," he said. "We don't want that to happen around here again."

Alcoa's two big aluminium smelters in Victoria - the other is at Point Henry, Geelong - have long been targets for those advocating reductions in greenhouse emissions.

The two smelters use between 20% and 25% of Victoria's electricity, largely produced by brown-coal-fired power stations in the Latrobe Valley. Power lines march 500 kilometres across the state to the Portland smelter, carrying electricity subsidised by taxpayers. An agreement signed in 1984 by the State Government guarantees Alcoa cheap power until 2016. The deal links the price of electricity to the world price for aluminium, leading to a discount of between $100 million and $200 million a year.

The Portland plant began smelting in 1986 and produces up to 350,000 tonnes of aluminium ingots a year - which are shipped overseas from Portland's harbour. Alcoa is Victoria's largest single exporter, responsible for about 7% of the state's exports.

The problem in a world concerned about climate change is that for every tonne of aluminium smelted, about two tonnes of carbon dioxide pour into the atmosphere, despite company efforts to reduce its greenhouse gas emissions.

But to Peter King, his workmates and fellow union delegates Tony Rogers and Tom Knight, the argument that their industry has no place here makes no sense. The smelting operation and its jobs would simply move somewhere else in the world, where it would probably become a bigger polluter, they believe. Despite their interest in the subject of emissions trading, none of them knew anyone who understood the details. It seemed a conversation for the elite.

"My son and daughter-in-law have spent more than half a million dollars setting up a day-care centre in this town," Mr Rogers said. "What happens to them when there is no work and incomes for families around here?"

Said Mr Knight: "I've just got married, I've worked in this plant for 20 years, my dad worked here and two of my brothers are contractors here. Close this place down and you kill this whole area."

Outside, the power lines sizzled, and far beyond, arguments about policy to tackle climate change crackled.

• The above article - written by journalist Tony Wright - was published in The Age newspaper on Thursday 17 July 2008.