Aluminium exporter, Alcoa has signed a 20-year deal to use brown coal-fired electricity to power its Victorian smelters.
Latrobe Valley power generator, Loy Yang Power will sell electricity to Alcoa until 2036, to power the smelters at Portland and Geelong.
The move has been welcomed by unions, but environment groups say the company should move towards a cleaner source of energy.
Loy Yang Power chief executive, Ian Nethercote says the deal provides certainty for both companies and their workers.
"This is a vote of confidence in Loy Yang and the way that we operate, by perhaps one of Australia's largest electricity consumers in the business," he said.
"I think that's a real feather in our cap to be able to have that joint venture with Alcoa."
Alcoa managing director, Alan Cransberg says there will not be a viable alternative to power the smelters in the next 20 years.
"From the employees perspective, they are delighted that we've managed to put a platform for future growth in this industry, to sustain our industry," he said.
"Without a long term contract, we stop investing in our industry and those jobs in regional Victoria, which are a very important part of those communities, would gradually disappear."
A spokeswoman for the State Government says the deal means Alcoa will no longer need Government subsidies, after the current contract expires in 2016.
Environment groups have condemned the deal.
Mark Wakeham from Environment Victoria says Alcoa should be moving away from coal-fired power.
"We have a gas-fired power plant being built not far from the smelters at Mortlake that could be powering the power stations," he said.
"We also have a lot of wind power in western Victoria. So by hitching its future to a brown coal power station, Alcoa is going to raise a lot of questions."
