The Portland community is celebrating a $230 million bailout for Alcoa as plans to restore the Victorian aluminium smelter get under way.
Work will begin immediately on restoring Victoria's struggling Alcoa aluminium smelter after a $230 million federal and state government bailout.
The small coastal town of Portland is celebrating following news of the four-year deal, which will save 700 jobs at the plant.
Victoria will contribute $200 million toward the deal, topped up by $30 million from the federal government, following a power outage last year that damaged equipment and left the plant facing closure.
The news has been heralded as a "lifeline" for the local economy, with Glenelg mayor Anita Rank saying the town is relieved "people can get back to work".
Local business owner Tim Black says if the smelter had closed, Portland would have lost a third of its population, with serious consequences for the town's economy.
The Victorian government has struck a deal with energy provider AGL to supply electricity to Alcoa, which would have been hampered by the closure of the Hazelwood coal-fired power plant.
Victorian Premier Daniel Andrews said the announcement wasn't about the politicians.
"The work you do here is first class," he told workers at Portland on Friday.
"(We've) come to an agreement that backs you, that says we have confidence in you, we believe in you, we're proud of you."
Alcoa chief executive Roy Harvey thanked the state and federal governments for their "unwavering support".
"Today's government and energy agreements will help make the Portland smelter more resilient against market volatility, maintain hundreds of jobs and provide a bridge to a potential long-term energy solution," Mr Harvey said in a statement.
The process of restoring the plant to restart smelting is expected to take about six months.
Prime Minister Malcolm Turnbull said the deal would allow repairs on the plant to start immediately.
"That is our commitment - to ensure that you can get back on your feet and get going again, creating great export dollars, defending 700 jobs here, and over 2000 in the region," Mr Turnbull told workers in Portland.
Under the deal conditions, the smelter must produce at least 270,000 tonnes a year and aim to hit 300,000 tonnes until June 2021.
If it closes before that time, it must repay some of the federal government funds.