Australia Backs Tomago Smelter Deal to Save 1,000 Jobs

Australian Prime Minister Anthony Albanese announced on Friday a government-backed agreement to secure the future of the country's largest aluminum smelter at Tomago in New South Wales, preserving more than 1,000 jobs and preventing its potential closure after 2028.

The deal involves collaboration between the federal and New South Wales governments and Tomago Aluminium, whose majority owner is Rio Tinto, along with partners Gove Aluminium Finance Ltd. and Norsk Hydro ASA. Owners of the facility have committed to investing at least A$1 billion in maintenance, upgrades, and exploration of decarbonization options. In exchange, authorities will provide a long-term, fixed-price power purchasing agreement, likely spanning 10 years, with discounted energy sourced from renewable projects including wind, solar, and battery storage. The arrangement is expected to be facilitated through a Commonwealth-owned entity such as Snowy Hydro.

The smelter, operational for over 40 years in the Hunter Region, faces a doubling of electricity costs when its current contract with AGL expires in 2028. Energy expenses already account for 40 percent of the plant's operating costs, and it consumes about 12...