The decision is in response to high operating costs and the lack of a competitively priced energy supply. The plant's small scale, outdated technology and logistical factors also impair its operating efficiency. The closure will affect 300 staff.

The 60kt/y facility has been operating at a loss for nearly two years despite management efforts to improve performance. High energy prices and other structural costs will keep the plant unprofitable at expected aluminum prices for the foreseeable future.

“We made significant efforts to improve performance at the smelter, including restructuring the workforce, installing new plant leadership and adjusting production levels,” said Alexandre Almeida, president of Novelis South America. “Unfortunately, we could not achieve profitability for the plant.”

The shutdown of the plant will not impact Novelis’ other operations in Brazil, including its other aluminum smelter at Ouro Preto.