The federal government has rejected claims that Alcoa is seeking a better deal on carbon tax compensation to ease its woes, maintaining its real battle is with the high Australian dollar and high input costs.
The struggling Victorian aluminium manufacturer said on Wednesday it would review the viability of its smelter in the Victorian city of Geelong, because low metal prices, a high Australian dollar and input costs had made it unprofitable.
The review is expected to be completed at the end of June, leaving the plant's 600 workers with an anxious four-month wait to find out whether they will lose their jobs.
A News Limited report that the company was pressing for more generous treatment under the carbon tax for both its Point Henry and Portland smelters, which rely on emission-intensive, brown-coal-generated electricity, was wrong, Industry Minister Greg Combet said.
"They haven't said that, in fact, to us at all," he told ABC television on Sunday.
Mr Combet said he believed the misleading report was based on a submission Alcoa made in 2011, when the carbon price mechanism was still being designed.
"I took into account what Alcoa and other aluminium manufacturers in this country had said in designing the carbon price and when we published the full details of the carbon price mechanism last July, Alcoa welcomed it," he insisted.
He reiterated the government's argument that Australia's manufacturing sector was struggling under the weight of the high Australian dollar and high input costs, not because of the carbon tax.
The carbon price impact on the aluminium sector would be minimal, Mr Combet said.
"It's only equivalent to about a one cent appreciation in the exchange rate," he said.
The $23 per tonne carbon emissions tax on the nation's 500 biggest polluters will come into effect on July 1.
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