More than 1000 jobs at Australia’s biggest aluminium smelter have been secured, the Prime Minister has declared, announcing a deal with the owners that will ensure the plant operates beyond 2028.
Tomago’s owners had warned of imminent closure due to a doubling of energy costs when the current electricity contract expires in 2028.
It is understood the government has secured a deal, potentially worth billions of dollars, to supply power to the smelter via the Commonwealth-owned Snowy Hydro generation company.
“All the workers here have a great Christmas and the knowledge that over coming months as a result of the decision that we have taken,” Albanese said at Tomago, near Newcastle, on Friday.
“I say to all the workers here, have a great Christmas in the knowledge that over 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.”
Tomago Aluminium, whose majority owner is mining giant Rio Tinto, has been locked in make-or-break negotiations with state and federal governments for months to find “viable pathways” to keep the 40-year-old smelter in NSW viable.
The energy-intensive plant consumes 12 per cent of NSW’s electricity production, and has been on the brink of closure as it faces a doubling of its electricity costs from 2028, when its current electricity contract with AGL expires.
If the taxpayer-funded support deal proceeds, it will mark the fourth time the Albanese government has intervened to prop up a struggling metals processor this year after it contributed to bailouts of Glencore’s Queensland copper smelter and refinery in October, Nyrstar’s smelters in Port Pirie and Hobart in August, and the collapsed Whyalla steelworks in February.
Tomago Aluminium, Australia’s largest aluminium smelter, produces up to 590,000 tonnes a year of the metal, which is widely used in construction, cars, drink cans, foil packaging and electrical products. Aluminium is also increasingly in demand in the construction of solar panels and wind turbines.
Processing alumina into aluminium is highly energy-intensive. Tomago said its energy costs accounted for 40 per cent of the smelter’s expenses and it needed internationally competitive price to remain commercially viable.
…more to come
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
