Western Australia union says it sees Alcoa alumina output hit by strike

By Kitco News / September 05, 2018 / www.kitco.com / Article Link

By Melanie Burton


MELBOURNE, Sept 5 (Reuters) - Alcoa's aluminaproduction has likely been hit by a four-week strike at itsWestern Australian operations, the Australian Workers' Unionsaid on Wednesday, raising the prospect of a widening supplydeficit in the key aluminium-making ingredient.


A spokeswoman said Alcoa had no additional comment onWednesday, after it had said there has been no significantimpact on output from the strike that began on Aug. 8.


A vote by the striking workers on whether to accept a newworkplace agreement is due to close on Thursday, with the unionanticipating a strong "no" vote that could prolong theindustrial action.


The strike comes as the global market for thealuminium-making raw material is suffering a shortfall. Pricesfor the white powder have surged this year, which has boostedcosts for aluminium makers like Rio Tintothatbuy in some alumina, while offering a bonanza to producers thatmake more than they need like South 32 .


Prices for alumina futures traded at $629.35 a tonnethis week, up 40 percent from $450 in late June.


"As a result of the industrial action, we would estimate thatproduction has been affected significantly," AWU NationalSecretary Daniel Walton said in a statement.


"Fully staffed, refineries should produce about 26,000 tonnesof alumina per day. Currently more than half the operationalstaff responsible for this work are on strike," he said in alater statement.


The global alumina market has been in a shortfall sinceearly this year, after the U.S. put sanctions on U.C. Rusal, andas the world's largest plant, Alunorte in Brazil, shuttered someproduction.


Around 1,500 workers at three alumina refineries and twobauxite mines in Western Australia state walked out on Aug. 8over a new workplace agreement that they say does not offersufficient job security.


The refineries account for around 9.3 million tonnes ofcapacity or some 8 percent of the world supply of alumina.


The refineries and mines are owned by Alcoa of Australia Ltd,which is part of the AWAC group of companies and owned 60percent by Alcoa and 40 percent by Alumina Ltd.
(Reporting by Melanie BurtonEditing by Joseph Radford)

+613 9286 1421; Reuters Messaging:melanie.burton.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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