Alcoa has announced it will permanently close its Point Henry aluminium smelter at Geelong in August.

The aluminium giant will also close its rolling mill in Geelong, along with a second rolling mill in Yennora, NSW.

The decision will affect almost 1,000 workers across the three sites.

In a statement on Tuesday, Alcoa said a strategic review found that the 50-year old Point Henry smelter had no prospect of becoming financially viable.

Meanwhile, the two rolling mills had been impacted by excess capacity in the Australian and Asian markets.

“Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future,” Alcoa chief executive Klaus Kleinfeld said.

“We recognise how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition.”

Alcoa also said it would seek a buyer for the Anglesea coal mine and power station, which currently provides power to the Point Henry Smelter.

The company said its Portland Aluminium smelter in Victoria would continue to operate, along with its Australian bauxite mining and Western Australian alumina refining operations.

Alcoa said the cost of its restructure and closures would be between $US250 million and $US270 million.

Closure ‘predictable’, Hockey says

Treasurer Joe Hockey says the closure of Alcoa’s Geelong aluminium smelter is disappointing but predictable.

Alcoa has announced it will permanently close its Point Henry aluminium smelter in Victoria in August.

“It’s disappointing but it was certainly predictable because in 2012 Alcoa did an analysis and said the plant was not financial viable,” Mr Hockey told reporters in Sydney on Tuesday.

He said the $40 million given to Alcoa by the previous Labor government was money “down the tubes”.

The carbon tax had added to the cost of production and the closure gave further weight to the argument that Labor should support the tax’s repeal in parliament, Mr Hockey said.

“It’s a massive cost on aluminium smelters, and a 50-year-old smelter with a carbon tax is never going to be cost-effective,” he said.

The treasurer said the government had no “silver bullets” to boost industry but would put in place the right tax and regulatory settings to create jobs.

Asked whether he had a message for Alcoa workers, Mr Hockey said: “I feel for you. This is a sad day for you and for others but there is a new dawn – it must get better and it will get better.”