Portland aluminum smelter (hereinafter, “Portland”), a joint venture partly owned at a 22.5% investment rate by Marubeni and located in Victoria state, Australia, has reached the conclusion of an additional 287 MW hedge agreement (hereinafter, “Additional Agreement”) on electricity pricing with AGL Energy Limited (hereinafter, “AGL”) on September 27, 2024. This follows the 300 MW hedge agreement signed with AGL on August 17, 2023.

 

Outline of Additional Agreement
As with the contract concluded last year, the Additional Agreement will take effect upon the termination of existing contracts with AGL and will facilitate electricity procurement at competitive prices for a period of nine years, from July 1, 2026, through June 30, 2035.

Background and Significance of Additional Agreement
Aluminum 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. The total hedging volume with AGL, including this Additional Agreement, shall meet up to 95% of the maximum electricity demand required for Portland through June 2035. In the additional agreement, a new option has been added to replace up to 30 percent of the contracted volume with a renewable Power Purchase Agreement with AGL. This hedge agreement will provide a solid foundation for Portland’s long-term operations and contribute to a stable supply of aluminum.

Future Outlook
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 aluminum 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. In July 2024, Portland was incorporated into Alcoa Corporation’s “Chain of Custody” certification, which is ASI’s management standard for responsible production, processing, and distribution traceability. Following Alouette aluminum smelter in Canada, another joint venture partly owned by Marubeni, Portland has now acquired all the ASI certifications.

Portland Aluminum Smelter Overview:

Related press releases:
Aug. 18, 2023
Portland Aluminium Smelter, Australia, Concludes a New Hedge Agreement on Electricity Pricing
https://www.marubeni.com/en/news/2023/info/00026.html

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

Oct. 20, 2022
Aluminerie Alouette Awarded the ASI Chain of Custody
https://www.marubeni.com/en/news/2022/release/00078.html