Rio Tinto’s Tomago aluminium smelter, Australia’s largest electricity user, could close if it failed to secure viable power beyond 2028. (Rio Tinto pic)
SYDNEY: Australia on Thursday said it would provide A$2.5 billion (US$1.76 billion) to help keep global miner Rio Tinto’s Tomago aluminium smelter, the country’s largest, open beyond 2028, with more affordable and reliable power supply.
The deal would support 3 gigawatts of new electricity generation for the smelter, with the financial package to be jointly funded by the federal and New South Wales state governments, a government statement said.
Rio Tinto warned in October that Tomago, the country’s largest electricity user, could be forced to close if it failed to secure commercially viable power beyond 2028.
Tomago will invest at least A$1.1 billion in the facility as part of the deal, including A$100 million to drive further decarbonisation activities at the smelter.
Like several other Australian smelters struggling with high energy costs during the transition to renewables, Tomago was built last century to take advantage of abundant cheap coal-fired power.
The federal government announced in December it was seeking to secure long-term, fixed-price energy supply for the smelter after its current power contract expires in 2028. Tomago employs more than 1,000 full-time staff and 200 contractors.