News: AGL UPDATE 3-Australia's $182 mln aid secures Alcoa plant, jobs in state hit by closures

• Deal 'defends' 2,000 Victoria jobs - PM Turnbull
• Federal government provides A$30 mln, state A$210 mln -source
• Repairs at Portland aluminium smelter to take 6 months
• Electricity supplier AGL also agrees four-year deal

(Recasts with state aid, Australian Energy Council comment)

An Australian smelter run by Alcoa Corp will resume production after being crippled by a major blackout last month, thanks to a A$240 million ($182 million) government-sponsored rescue package securing its future for at least four years.

The aid from the federal and state governments is the latest move to save jobs in Victoria state, a region already hit hard by the shutdown of three major carmakers, a power station set to close and a steel plant struggling to stay open.

A power outage at Alcoa's Portland smelter had caused molten aluminium to solidify, forcing it to run at less than a third of capacity and threatening its future. Alcoa said on Friday it will immediately begin work on a full restart, a process that would take around six months.

"This is our commitment to ensure that you can get back on your feet and get going again, creating great export dollars and defending 700 jobs here, and over 2,000 in the region," Australian Prime Minister Malcolm Turnbull said, speaking to smelter workers during a visit to the site.

A person familiar with the terms of the support package told Reuters that A$30 million ($23 million) in funds will be supplied by national government in Canberra, with a further A$210 million from the Victorian state government.

The government's financial aid is dependent on the smelter remaining open at least until 2021 and output remaining at least 90 percent of pre-blackout levels. Once restart work is completed, the smelter will be restored to the roughly 300,000 tonnes a year production rate it was operating at prior to December 2016, Alcoa said.

Cheap and reliable power is key to keeping the Portland smelter open. The plant is co-owned by Alcoa, Australian firm Alumina Ltd (AWC), China's CITIC Resources <0267.HK> and an arm of Japan's Marubeni Corp <8002.T>.

The plant has lined up a four-year power supply deal with AGL Energy (AGL) for 510 megawatts, or about 10 percent of the state's electricity load, the companies said. No details were disclosed on the pricing.

Allowing the Portland plant to collapse would have intensified pressure on power producers, all facing challenges from a push toward cleaner energy and a drop in electricity demand, which has driven down electricity prices.

"Victoria has had more supply than it has demand for in recent years and if Alcoa had collapsed, it would have had a substantial impact," said Carl Kitchen, spokesman for Australian Energy Council.

($1 = 1.3214 Australian dollars)