The Tomago aluminium plant in New South Wales, which produces about 37% of Australia's aluminium and consumes 10% of the state's electricity, faces potential closure. Rio Tinto, a part owner, says it cannot secure affordable power from 2028 when its current contract expires. The federal government says all options are on the table to help the struggling smelter.
Industry Minister Tim Ayres stated that no option is off the table, including a potential public stake or subsidising power bills, but declined to provide details due to confidential discussions. The government aims to secure a good result for the region and Australia.
The federal government announced a $2 billion green metal fund before the election, offering tax credits for aluminium and steel produced with renewable energy. Rio Tinto's CEO had previously expressed optimism about the plant's future, but within nine months, the company shifted to warning of closure.
Minister Ayres noted that the production credit is designed to secure aluminium's future in Australia, citing optimism for the Boyne Island smelter in Queensland, where Rio has invested in wind and solar projects. However, more work is needed in New South Wales, where the Tomago smelter faces a four-to-five-year bridge before securing renewable energy and transmission investments.
Ayres criticised elements of the National Party for campaigning against wind, solar, and transmission, arguing that this harms blue-collar jobs. He emphasised that industrial Australia needs more electricity and transmission to support manufacturing and meet market demands for cheap, renewable power.
