It seemed inevitable – politically at least – that the federal government would step in to save Tomago Aluminium in New South Wales, Australia’s largest aluminium smelter.
Rio Tinto, the owners of Tomago, has enjoyed attractively priced electricity for a long time, most recently with AGL. But this contract ends in 2028. Unable to find a replacement at a price it could accept, Rio Tinto warned that Tomago was facing closure. Tomago produces more than one-third of Australia’s aluminium and accounts for 12% of NSW’s energy consumption.
On Friday, Prime Minister Anthony Albanese announced a Commonwealth-led deal for electricity supply beyond 2028. This deal will provide the smelter with billions of dollars in subsidised power from the Commonwealth-owned Snowy Hydro through a portfolio of renewables, backed by storage and gas. This follows months of negotiation to avoid the smelter closing and sacking its roughly 1,000 workers.
