Aluminium giant Alcoa says it will restart a dormant potline at its Portland smelter in south-west Victoria.

At an aluminium smelting facility, large pots are used to contain bricks of alumina ore with a carbon cathode, where they undergo heat and electrochemical treatment to produce aluminium. 

Alcoa has plans to restart a potline - which is comprised of multiple pots - that has sat idle since 2009.

When it is running, site capacity should be at about 95 per cent. The $28 million project should create about 30 full-time jobs. 

The announcement comes just nine months after state and federal governments came together to secure a five-year lifeline for the smelter in a $150 million government-backed energy deal. 

Energy provider AGL has agreed to power the smelter for four years from July 2022. 

Environmentalists are concerned that the expansion will draw more coal-fired power, after  Alcoa decided not to transition to 100 per cent renewables in its licence renewal negotiations.