The country’s largest aluminium smelter at Tomago, Newcastle, may stay open beyond 2028 with the federal government stepping in to help secure a new power deal.
Canberra is joining the NSW Government and smelter owners in finding a new long-term renewable power deal with the current deal ending in 2028.
Under any long-term, fixed-price power supply deal, the smelter will be given subsidies to accelerate renewable power generation and storage.
Owners Tomago Aluminium will have to spend at least $1 billion on capital and major maintenance spending over the next 10 years and identify more decarbonisation opportunities, the federal government says.
Prime Minister Anthony Albanese says they want to keep the smelter running long-term.
“We want to ensure that Tomago continues to forge Australia’s prosperity and continues to create and sustain good, skilled jobs,” he says.
“We will ensure it has a central place in Australia’s future.”
“The aluminium industry is no longer competing against foreign companies
but against foreign governments writing the rules to their own advantage.”
Australian Aluminium Council CEO Marghanita Johnson
TOMAGO’S FUTURE
Minister for Industry Tim Ayres says the smelter is “vital” to the Hunter, aluminium supplies and national interest.
“We want Tomago workers to have as much certainty as possible. I want to reassure the community that every lever in government is being looked at to secure industry in the Hunter,” he says.
Energy Minister Chris Bowen says Tomago Aluminium have made their position “clear” on what the future is for them.
“The smelter needs a reliable and affordable supply of renewable energy with ageing coal-fired power options being prohibitively expensive.”
MP for Paterson Meryl Swanson (ALP) says they have “worked very hard” to find a practical solution using renewable energy.
Tomago Aluminium Chief Executive Officer Jerome Dozol says they are “grateful” for the involvement of both governments.
“Today’s development represents a significant milestone in our ongoing engagement with stakeholders working towards this shared goal,” he says.
“We look forward to working collaboratively with government on this next phase.”
INDUSTRY REACTION
News of federal involvement was welcomed by the Australian Aluminium Council.
Council CEO Marghanita Johnson says “competitive energy is the critical foundation that enables Australian businesses to succeed in global markets”.
“For aluminium smelters, it is not optional — it is existential,” she says.
“The aluminium industry is no longer competing against foreign companies but against foreign governments writing the rules to their own advantage.”
She says governments must use every tool to secure competitively priced electricity for the industrial base.
“Today’s announcement represents a step in the right direction in creating the conditions needed to help restore Australia’s industrial competitiveness,” she says.
The council represents Australia’s bauxite mining, alumina refining, aluminium smelting and downstream processing industries.
It says aluminium is Australia’s most valuable manufacturing export, employing more than 20,000 people and adds $18 billion to the economy, mostly in export sales.
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