The Australian federal government has unveiled a rescue plan to keep the country’s largest aluminium smelter, Tomago Aluminium, open beyond 2028.
The federal government will work together with the New South Wales state government and Tomago Aluminium on a long-term renewable energy solution to support the smelter’s viability when its current energy contract expires in 2028.
The deal would involve securing a long-term fixed-price power purchasing agreement for the smelter, along with concessional finance arrangements to accelerate renewable energy generation and storage developments in New South Wales.
Prime Minister Anthony Albanese said: “We want to ensure that Tomago continues to forge Australia’s prosperity, and it continues to create and sustain good, skilled jobs.
“Tomago has a proud place in Australia’s history – and we will ensure it has a central place in Australia’s future.”
The deal comes after Rio Tinto, which owns the majority of Tomago Aluminium, warned in October that the smelter might be forced to shut down after failing to secure affordable energy supplies.
Tomago Aluminium produces up to 590,000 tonnes of aluminium a year, or almost 40 per cent of Australia’s annual aluminium production.
Albanese said it is vital that the smelter maintains operations as it produces a vital product of national interest.
“If Australia doesn’t produce aluminium, then the knock-on effect in other industries is significant because aluminium is increasingly a vital product,” said the Prime Minister.
Tomago Aluminium CEO Jerome Dozol welcomed the government’s commitment to finding competitively priced energy for the smelter.
“We are grateful to both the federal and New South Wales governments for their commitment and partnership in working to address our energy challenges,” Dozol said.
“Today’s development represents a significant milestone in our ongoing engagement with many stakeholders working towards this shared goal.
“It reflects our collective recognition of the importance of maintaining local manufacturing capability in Australia.”
Tomago Aluminium would contribute at least AU$1 billion in capital and major maintenance investment over the next decade, which includes identifying further decarbonisation opportunities for the smelter.
Industry Minister Tim Ayres said the government is still working through the total costs of the agreement.
“In terms of the costs of this agreement, we will work those issues through with the owners of the facility and closely working through New South Wales.
“The fundamental premise of this is a long-term power purchasing agreement that delivers security at the right price for Tomago so they are internationally competitive.”
