In a significant turn of events, Australia’s largest aluminium smelter has received a lifeline, securing over 1000 jobs thanks to a crucial agreement forged by the government. This intervention ensures the plant’s operations will continue beyond 2028.

Rio Tinto had previously issued a stark warning regarding the imminent closure of its Tomago smelter, situated in New South Wales’ Hunter Region. The impending end of its coal power contract in 2028, coupled with escalating energy costs, had placed the smelter’s future in jeopardy.

Prime Minister Anthony Albanese has now revealed that a collaborative effort between the federal and NSW governments and the smelter’s owners has resulted in a pivotal deal. This agreement will provide the facility with clean energy, ensuring its continued operation.

During a press briefing in Tomago, Albanese elaborated on the arrangement, noting that the smelter’s board had deliberated on the proposed measures. “What this means is that Tomago will commit to enhancing their capabilities with further investment, while we ensure a stable energy price,” he explained.

The Prime Minister underscored the importance of this deal, emphasizing that keeping the smelter active aligns with the “national interest,” sustaining employment and bolstering Australian manufacturing.

“I say to all the workers here, have a great Christmas in the knowledge that over the coming months, as a result of the decision that we have taken, we’ll be working on finalising these details to make sure that your future is as secure,” he said.

“My government is working together with the NSW state government and Tomago Aluminium on a new energy agreement that will secure the future of the facility.”

The federal government was in negotiations with the NSW government over funding arrangements.

The details will be finalised in the coming months. 

Based in the Hunter about 13km west of Newcastle, Tomago is Australia’s largest aluminium smelter and produces almost 40 per cent of the country’s aluminium.

Rio Tinto is the majority owner, with Gove Aluminium Finance and Norwegian-owned energy company Norsk Hydro also owning smaller parts of the smelter.

In late October, Rio Tinto announced that the increasing cost of energy meant it was struggling to find an “economically viable” solution to keep the plant operating past the end of the contract.

The company started consultations with the employees regarding the future of operations.

“We continue to engage with stakeholders on a viable pathway for Tomago,” Tomago Aluminium chief executive Jérôme Dozol said at the time.

“Unfortunately, all market proposals received so far show future energy prices are not commercially viable, and there is significant uncertainty about when renewable projects will be available at the scale we need.

“While no decision has been made, this is a difficult point to reach.”