The Prime Minister announced a government-backed rescue plan to keep Tomago Aluminium, Australia’s largest aluminium smelter, operating beyond its 2028 power contract end date amid spiraling energy costs.

Australia’s government will work with Rio Tinto to maintain Tomago’s operations beyond the current contract, aiming to secure long-term energy supplies.

The plan seeks a fixed-price power-purchase agreement for Tomago and to accelerate renewable energy generation infrastructure in New South Wales.

Tomago, a major energy user in New South Wales, faces high energy costs as the economy transitions to renewables, making affordable power critical to its viability.

The project would mobilize at least A$1 billion in capital and major maintenance work over the next decade, including decarbonisation opportunities.

Tomago Aluminium produces up to 590,000 tonnes of aluminium annually, with energy costs around 40% of total expenses, underscoring sensitivity to electricity prices.

If a deal is reached, Tomago could generate at least A$1 billion annually.

Industry and government discussions are ongoing to work out the total costs of the agreement and secure long-term energy supplies for Tomago.

The Prime Minister stressed workers’ confidence about their futures and that final details will be finalized in coming months to secure the plant’s viability.

Rio Tinto and Tomago report progress addressing energy challenges, with collaborative efforts among joint venture partners.

Tomago, majority-owned by Rio Tinto and employing over 1,000 staff plus 200 contractors, faced potential closure without affordable energy.

Rio Tinto warned that Tomago could shut in 2028 if the current power contract with AGL Energy ends, unless a more economical energy solution is secured.