John Bevan, Alumina's chief executive, said that the short-term outlook was still volatile and he didn't rule out production cut-backs, despite demand for aluminium being high.

The company operates high-cost, high-energy aluminium smelters in Victoria as part of its 40% stake in AWAC, a partnership with Alcoa, which owns the remaining 60%.

According to JP Morgan analyst Lyndon Fagan, a 44% increase in Alumina's net debt is cause for concern. He said that with prices unlikely to witness dramatic improvements, AWAC will remain a marginal business over the next six months.

Alumina posted an EBITDA of $161M compared with a figure of $611M 12 months ago.

One of AWAC's Australian smelters is the Point Henry facility at Geelong, which recently received a $40M bailout from Australia's Federal Government, saving 600 jobs, but raising the hackles of opposition MPs who argued that the hand-out was suspicously similar in size to the amount of carbon tax the smelter has was due to pay.