Bell Bay Aluminium smelter marks highs and lows after six decades of operation

One of Tasmania's largest manufacturing employers says it has adapted to tough economic conditions to celebrate 60 years of operation.

Bell Bay Aluminium smelter is the oldest in the Southern Hemisphere and was built in 1955, when importing aluminium became difficult. It was bought by Rio Tinto Aluminium in 1960 and now directly and indirectly employs about 1,500 people.

Managing director Ray Mostogl said the company had to adjust to changing economic conditions to remain viable.

"We've certainly learned how to take more risks with our operation in terms of the raw materials that we buy and the products that we try," he said. "We've chased different markets to sell metal, we send metal now to China," he added.

But the global market has changed significantly. In 2011 the aluminium price plummeted to almost record lows seen during the global financial crisis. A year later, Bell Bay began a significant restructure.

Independent economist Saul Eslake said the company had come through the slump particularly well, but the global market place was still a challenging environment.

"The biggest challenge will be operating in a highly competitive global market in which excess supply is an increasing risk," he said.

"And there's probably not an aluminium smelter that's further away from the major customers than Bell Bay, which means it incurs relatively high transport costs.

"It's relatively small in comparison to the newer smelters which had opened up in Asia and the Middle East over the last decades, so historically it's had a relatively high cost structure."

But Mr Eslake said Bell Bay had managed to lower its operating costs to remain competitive.

Earlier this year the State Government negotiated a secret deal for subsidised power for Bell Bay, and the company announced $30 million for further upgrades. The Australian Workers Union's Robert Flanagan said workers had made a significant contribution to the plant's viability.

Tasmanian Premier Will Hodgman said it was committed to supporting the manufacturer.

"We're confident that this business has not only taken steps to itself to ensure it's more productive and competitive," he said.

"But it's working closely with Tasmania's government business enterprisers to make sure we're doing everything we can to keep Tasmania as an attractive place to do business."

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