Major smelter’s future secured after taxpayer bailout
More than 1,000 jobs at a troubled aluminum smelter have been secured after the federal government stepped in to keep it operating with taxpayer support.
Rio Tinto, the majority owner of the massive Tomago smelter near Newcastle, has been threatening to close the plant for months due to rising energy costs.
But on Friday the government announced it had reached a deal with the mining giant to keep Tomago running, after promising to use taxpayer funding to supply cheaper energy to the smelter.
“It’s important that we continue to get things done here as a nation and that the program we’re working on ensures the long-term future by providing security going forward,” Prime Minister Anthony Albanese said when announcing the deal.
Full details of the arrangements have not yet been announced but will also include the NSW government providing support and undertake new renewable energy generation, storage and transmission projects.
Industry Minister Tim Ayres said the total cost had not yet been agreed.
Tomago produces more than a third of Australia’s aluminium.
Electricity accounts for 40 percent of operating costs at Tomago, which started production in 1983 and supplies up to 590,000 tons of aluminum annually.
The smelter is the largest user of electricity in the country, consuming about 10 per cent of power supplies in NSW.
Australian Trades Union welcomes the announcement
“This is a pivotal moment for Australian manufacturing,” AWU national secretary Paul Farrow said.
“We’ve been saying for months that Tomago is no ordinary industrial park. This is a test case of whether Australia is serious about having a manufacturing future.”
The announcement follows a series of agreements by the federal government to keep smelters operating across the country as rising energy costs threaten sustainability.
In October the federal and Queensland governments agreed a joint $600 million support package for a copper smelter at Mt Isa.
A few months ago, the Commonwealth, South Australian and Tasmanian governments allocated $135 million in taxpayer funds to keep the Nyrstar lead and zinc smelters operating; Some of the funding would be used to expand production of critical minerals such as antimony.
Rio Tinto has been contacted for comment.
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