Australia’s biggest aluminium smelter gets promise of cheaper, renewable power from feds and state

More than 1000 jobs at a troubled aluminium smelter have been secured after the federal government stepped in to keep it running with taxpayer support.

Rio Tinto, majority owner of the massive Tomago smelter near Newcastle, had for months been threatening to shut down the plant due to spiralling energy costs.

But on Friday, the government announced it had come to an agreement with the minerals giant to keep Tomago running after promising to use taxpayer funding to provide the smelter with cheaper power.

“It’s important we as a nation continue to make things here, and the program that we’ve been working on to ensure that long term future, by giving security going forward,” Prime Minister Anthony Albanese said as he announced the deal.

The full details of the arrangements are yet to be revealed but will also involve the NSW government providing support and will underwrite new renewable energy generation, storage and transmission projects.

The total cost was yet to be agreed to, Industry Minister Tim Ayres said.

Tomago produces more than a third of Australia’s aluminium.

Electricity makes up 40 per cent of operating costs at Tomago, which began production in 1983 and delivers up to 590,000 tonnes of aluminium a year.

The smelter is the single largest electricity user in the nation and consumes about 10 per cent of power supplies in NSW.

The Australian Workers’ Union welcomed the announcement 

“This is a pivotal moment for Australian manufacturing,” AWU national secretary Paul Farrow said.

“For months we’ve been saying that Tomago isn’t just another industrial site. It’s the test case for whether Australia is serious about having a manufacturing future.”

The announcement comes after a flurry of deals struck by the federal government to keep smelters running across the nation as rising energy costs threatened their sustainability.

In October, the federal and Queensland governments agreed on a $600 million joint support package for a copper smelter in Mt Isa.

A few months prior, the Commonwealth, South Australian and Tasmanian governments stumped up $135 million in taxpayer funds to keep Nyrstar lead and zinc smelters operating, with part of the funding going to expand production into critical minerals such as antimony.

Tomago Aluminium says it welcomes the deal, which it says has come out of “constructive engagement” between the smelter’s owners and the federal and state governments.

“Today’s development represents a significant milestone in our ongoing engagement with many stakeholders working towards this shared goal,” Tomago Aluminium chief Jerome Dozol said in a statement.

“It reflects our collective recognition of the importance of maintaining local manufacturing capability in Australia,” he added.

“We look forward to working collaboratively with government on this next phase.”

Source: AAP