UPDATE: Mining giant Rio Tinto is in urgent negotiations with the federal and New South Wales (NSW) governments to prevent the closure of Australia’s largest aluminium smelter. The Tomago Aluminium facility is facing a critical threat due to soaring electricity costs that could jeopardize its operations beyond 2028.
As of Friday, Tomago officials announced they are collaborating with government ministers to identify “viable pathways” to secure the future of the plant, which is essential for over 1,500 jobs in the Hunter region. Ongoing crisis talks focus on potential taxpayer-funded assistance aimed at keeping the smelter operational.
If a support deal is finalized, it will represent the fourth intervention by the Albanese government this year to rescue a struggling metals processor. Earlier bailouts included Glencore’s Queensland copper smelter and refinery on Wednesday, Nyrstar smelters in Port Pirie and Hobart in August, and the collapsed Whyalla steelworks in February.
According to Tomago chief executive Jerome Dozol, energy costs currently make up over 40 percent of the smelter’s operational expenses. With the existing contract with AGL set to expire at the end of 2028, costs are expected to more than double, significantly impacting the plant’s economic viability.
“The greatest challenge for our business is energy, with reliable and affordable power essential for aluminium smelting on a sustainable basis,” Dozol stated. He emphasized that proposed market rates for power starting January 2029 could fundamentally change the operating economics of the plant.
The Tomago Aluminium smelter is not just the largest in Australia; it is also the single largest consumer of electricity in NSW, accounting for over 10 percent of the state’s power supply. The smelter produces up to 590,000 tonnes of aluminium annually, a critical material for various industries including construction, automotive, and renewable energy.
Aluminium’s increased demand for applications such as solar panels and wind turbines highlights the urgency of securing the Tomago facility’s future. With negotiations ongoing, the outcome will have significant implications for both local jobs and the broader aluminium market in Australia.
As developments unfold, all eyes will be on the negotiations between Rio Tinto and government officials. The potential closure of this pivotal smelter could lead to a major economic shift in the region, affecting thousands of families and the wider industry reliant on aluminium.
Stay tuned for the latest updates on this developing story as officials work to reach a resolution that could save the Tomago Aluminium smelter.
