The Tasmanian state government has decided to extend its power supply agreement with Bell Bay Aluminium for 12 months, securing hundreds of jobs as talks are underway over a potential federal government support package.
Hydro Tasmania and Bell Bay Aluminium have now signed a new deal.
Bell Bay Aluminium have been in discussions with Hydro Tasman for a new power deal after its 10-year agreement expires on December 31.
Minister for Energy and Renewables, Nick Duigan, said the deal provides the time needed to work with the federal government on a long-term arrangement.
“This extension will allow the Federal Labor Government to confirm BBA’s eligibility for the Green Aluminium Production Credit Scheme following finalisation of their consultation and design process.”
Duigan said the smelter injects AU$700 million into Tasmania’s economy, directly employs over 550 people and supports more jobs through a supply chain of almost 300 local businesses.
The agreement formalises an in-principle agreement between Hydro Tasmania and Bell Bay Aluminium announced in November.
Bell Bay Aluminium is among other aluminium smelters and refineries in Australia that are struggling with rising energy costs and tougher global competition.
Another Rio Tinto aluminium smelter, Tomago Aluminium, has begun a consultation process with employees about the future of its operations.
The federal government is looking into various financial support options. In January, the government launched the AU$2 billion Green Aluminium Production Credit, available from 2028–29, which will support Australia’s aluminium smelters to transition to renewable electricity.