Portland aluminium smelter (hereinafter, “Portland”), a joint venture partly owned at a 22.5% investment rate by Marubeni Corporation (hereinafter, “Marubeni”) and located in Victoria state, Australia, has announced the conclusion of a new hedge agreement on electricity pricing with AGL Energy Limited (hereinafter, “AGL”).

 

The new agreement will take effect upon the termination of existing contracts with AGL from July 1, 2026, and will facilitate electricity procurement at competitive prices for a period of nine years, through June 30, 2035. The 300 MW hedging volume under the new agreement represents approximately 50% of the energy required to meet Portland’s nameplate capacity of 360,000 tons of aluminium per year, which is equivalent to about 20% of Australia’s aluminium production.

Aluminium smelting requires a large amount of electricity, and electricity accounts for about one-third of the total costs associated with smelting. The state of Victoria, Australia, has set a policy to increase the percentage of renewable energy in the region to 65% by 2030 and 95% by 2035, with volatility in the pricing of electricity over this period predicted to increase. This hedge agreement will provide a solid foundation for Portland's long-term operations and contribute to a stable supply of aluminium.

Marubeni has made “Green Strategy” one of its fundamental policies to enhance its corporate value in its current Mid-Term Management Strategy “GC2024.” GC2024 positions aluminium as a key component within Marubeni’s green business given its status as an essential material resource in the transition to a decarbonized society. Marubeni will actively endeavor to ensure that responsible production* at Portland contributes to the realization of a sustainable society.

Responsible production: In May 2023, Portland was awarded the ASI Performance Standard certification in recognition of the integrity of its operations and its extensive environmental and safety initiatives. For further details, please see the May 2023 related press release below.

 

Overview of Portland Aluminium Smelter:

Related press releases:
November 12, 2019
Participation in the Aluminium Stewardship Initiative
https://www.marubeni.com/en/news/2019/release/20191112E.pdf

May 26, 2023
Portland Aluminium Smelter Awarded ASI Performance Standard Certification
https://www.marubeni.com/en/news/2023/release/00059.html