By James Regan

SYDNEY (Reuters) - Australia's second-most populous state faces a severe power shortage over the Christmas holidays due to a staff lock-out at the Yoy Lang power station and coal mine, energy provider AGL Energy Ltd said on Thursday.

In response to union plans to stage a work stoppage on Dec. 28, AGL said it will lock out 578 employees at both sites in Victoria state to protect the safety of employees and equipment.

AGL warned the lockout would create a "significant disruption" and put power supplies at risk. The lockout could leave the power station and mine at least partially shut for possibly up to 10 days, according to an AGL spokeswoman.


"You don't just shut something of this size down immediately. You must prepare ahead of time and wind things down, and then slowly ramp back up," the spokeswoman said. "It could take up to 10 days."

The mine also supplies a second power station owned by France's Engie, which means more than half the state's energy fuel will be disrupted.

"AGL will not stand by and have our customers and the broader community risk being without power in summer due to industrial action," the station's general manager, Steve Rieniets said in a statement.

"We are also concerned that industrial action may place the safety of our operations, our plant and our people at risk," Rieniets said.

AGL's move is part of its escalating feud in Victoria with the Construction, Forestry, Mining and Energy Union over stalled talks over wages and working conditions.

A stoppage would leave one of the state's biggest industrial users, the Portland aluminum smelter, without power, according to a spokesman for the metal processing plant.

The smelter, co-owned by Alcoa, CITIC Resources and an arm of Marubeni Corp, produces about 300,000 tonnes of aluminum a year. A long power outage can cause molten aluminum to solidify inside the smelter.

The state government has made an application to the Fair Work Commission, which oversees labor disputes, in hopes of having the lockout or a union strike terminated and reopening negotiations between the union and AGL.

(Reporting by James Regan; Editing by Tom Hogue)

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