Tomago Aluminium has initiated a consultation process with its employees regarding the future of its operations, as challenges regarding energy supply continue to mount. The discussions, which began today, aim to gather feedback from employees and union representatives before any decisions are made about the smelter’s future.
Energy Supply Concerns Mount
Since 2022, Tomago Aluminium has been engaged in a thorough market-sounding process to identify a feasible energy solution for when its current electricity supply contract expires in 2028. Despite extensive efforts, the company has not yet found a viable pathway that supports sustainable operations beyond this date. Electricity costs represent over 40 percent of Tomago’s operating expenses, making the search for competitively priced energy crucial to the smelter’s future.
According to the company’s assessments, both coal-fired and renewable energy options are projected to see significant price increases starting in January 2029. Such changes would fundamentally alter the economics of operating the smelter, raising concerns about its viability. As a result, Tomago Aluminium is now contemplating the difficult decision of potentially ceasing operations when the current energy contract concludes.
Consultation Process and Future Steps
While no final decision has been made regarding the smelter’s future, the consultation process is set to run until November 21, 2023. This timeframe allows employees and union representatives to provide their perspectives on the potential challenges ahead, helping to shape the path forward for the company.
Jérôme Dozol, Chief Executive Officer of Tomago Aluminium, emphasized the importance of stakeholder engagement in addressing the current energy crisis. He stated, “We continue to engage with stakeholders on a viable pathway for Tomago. 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.”
As the company navigates this challenging landscape, Dozol reiterated the commitment to operating safely while providing clarity to employees as soon as possible. The outcome of these consultations will play a critical role in determining the future of Tomago Aluminium and its workforce.
