Double standards call over billion-dollar smelter offer
A potential multi-billion dollar bailout of Australia’s largest aluminum smelter looks like a “double standard”, according to the Liberal state government as it struggles to keep its own plant running.
Tomago Aluminum, majority owned by Rio Tinto, says high energy costs are forcing the company to consider winding down its operations when its electricity supply contracts expire in 2028.
But the federal government’s numbers are desperate to keep the smelter operating, and Tomago has contacted both the federal government and state politicians for a rescue package worth more than $1 billion.
This caught the attention of Tasmanian Industry Minister Felix Ellis, who said the federal Labor government was ignoring calls for a similar deal from the Liberal-run state.
Bell Bay Aluminum in Tasmania, also owned by Rio Tinto, is facing potential closure as the 10-year deal with Hydro Tasmania approaches its December 31 deadline.
Mr Ellis said hundreds of Tasmanian jobs were left on hold because the federal government could not confirm whether Bell Bay would receive support.
“They are stepping back to support Tomago, reportedly considering a billion-dollar bailout, but Tomago is not lifting a finger to help Bell Bay Aluminum, the only renewable energy-powered smelter in the country,” he said.
“Tasmania did the right thing, we invested in renewable energy, supported our workers and fought to keep Bell Bay strong, but we can’t do it alone.”
Tomago produces almost 40 per cent of the country’s aluminum and its difficulties follow rescue packages for many other smelters and refineries, including a multibillion-dollar package to save the Whyalla steelworks in South Australia.
Swiss mining giant Glencore received a $600 million injection in October as part of a joint federal and state deal that will keep open its Mount Isa copper smelter and Townsville copper refinery in Queensland, creating around 600 jobs.
Tomago, which produces about 600,000 tons of aluminum annually, said electricity accounts for 40 percent of its operating costs.
Liberal Senator Susan McDonald, whose party has been at the center of the latest row over supporting net-zero emissions targets, said Labour’s “renewables-only agenda” was damaging the sector.
“Ministers are refusing to accept reality as they pursue a renewable energy frenzy,” he said.
“This abject failure of policy leaves our supply chains vulnerable, kills Australian jobs and destroys our ability to sovereignty.”
The Greens argued that bailing out big companies was not the right use of public money.
The smelter, located about 13km west of Newcastle, employs more than 1,000 staff from a region stretching from the Hunter Valley to the Central Coast.
Approximately 90 percent of its product is exported to the Asia-Pacific region.
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