The pressures of a high Australian dollar and competitive aluminium market are behind Alcoa's decision to close its Point Henry smelter, the Victorian premier says.
Premier Denis Napthine said aluminium production rates have outstripped demand, making it hard for the 50-year-old Point Henry smelter to compete.
"The combination of the high Australian dollar and very competitive world market for aluminium and aluminium products have made their business not viable in Geelong," Dr Napthine told Fairfax Radio.
"We'll certainly be working with Alcoa and the workers during this transition phase."
Dr Napthine said Alcoa had given him assurances that the Portland plant in his electorate had a secure future and would be not affected by the Point Henry closure.
The Victorian and former Labor federal governments struck an agreement around 18 months ago to keep the smelter open until the middle of 2014.
Speaking to reporters before Alcoa's announcement, Dr Napthine said any decision on the Point Henry smelter's future was one for the company.
"We have an agreement with Alcoa to continue to operate the Point Henry smelter until the middle of this year," he said.
"That agreement was struck some time ago by an agreement between the then federal Labor government and ourselves.
"Any decisions on those matters and the future are in the hands of Alcoa."
Dr Napthine says he is sure Alcoa will accept its corporate responsibility to look after its employees in any situation.
The Geelong smelter will close in August, with 500 people to lose their jobs.
A further 480 people employed at an adjacent rolling mill at Point Henry and another at Yennora in NSW will also be made redundant when the mills shut by the end of this year.
