Combet rejects NSW call to save smelter

Federal Industry Minister Greg Combet has rejected a call from NSW for the commonwealth to bail out a Hunter aluminium smelter.

The federal government is reportedly set to announce a $42 million rescue package for Alcoa's Point Henry aluminium smelter operations near Geelong in Victoria to help save 600 jobs.

Norwegian firm Norsk Hydro announced earlier this month 300 redundancies at its Kurri Kurri smelter, in the NSW Hunter Valley, following the loss of 150 jobs in January.

The company announced the plant would close in May.

In January, Tomago Aluminium confirmed 100 jobs would go as part of a major restructure at another Kurri Kurri plant.

NSW Energy Minister Chris Hartcher says that if Canberra can save a Victorian plant, it should put up funds to save a Kurri Kurri operation.

"Why are jobs located in the Hunter of lesser value than those in Geelong?" he said in a statement.

"Greg Combet is citing the same cost pressures for the Point Henry smelter as he did for the Kurri Kurri and Tomago smelters, agreeing that the aluminium industry is under significant pressure due to the value of the high Australian dollar and low aluminium prices."

But Mr Combet said the situation at Kurri Kurri was different to Point Henry because the NSW government had failed to offer reasonable electricity prices.

"As well as the broader pressures being faced by all aluminium smelters, the key uncertainty facing Norsk Hydro's Kurri Kurri smelter has been the refusal of the NSW government to reach agreement over a long-term electricity supply contract," a spokesman for the minister said in a statement to AAP.

"Norsk Hydro has made it clear to the federal government that the only government policy material to (influence) their decision was the electricity contract offered by (Premier) Barry O'Farrell that contained significantly higher power prices."

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