Carbon Tax biting already.

Labor's carbon tax is starting to bite already with it cited as one of the reasons Norsk is closing it's  Hunter valley smelter and 340 workers are losing their jobs. Aluminium smelting is a very power-hungry process and Australia has historically had very low energy costs - a situation  now changed by the forcible addition of expensive and inefficient "green" energy to the grid . In a struggling economic climate this additional punitive tax will send many struggling businesses to the edge especially non-incorporated small businesses which will receive no help at all and they employ the majority of the Australian workforce. Australia's smelters are competing poorly with China where energy costs are much lower and labor costs are small.

Norsk Hydro has announced plans to close its Kurri Kurri smelting operation, as a result of weak earnings and an uncertain outlook for the future of the business.

Norsk said yesterday it was in “consultation” with the plant’s 344-strong workforce to deliver the bad news.

According to Hydro's Primary Metal business area executive president, Hilde Merete Aasheim, the profitability of the Kurri Kurri plant – new Newcastle – has suffered as a result of low metal prices, weak economic conditions, and the strong Australian dollar.

Norsk’s management team have reportedly performed a “thorough review” of the business, deeming it unprofitable in the short term, and likely unprofitable in the longer-term due to increasing energy costs and the impending carbon tax.