Australia bails out Tomago aluminium smelter

The Australian federal government and the New South Wales government have agreed to provide a A$2.5 billion (US$1.8 billion) support package to secure the long-term future of the Tomago aluminium smelter, Australia's largest aluminium smelter, located in the Hunter region of New South Wales. The smelter, majority-owned by Rio Tinto (corporation) (51.55%) with stakes held by Gove Aluminium Finance (36.05%) and Norsk Hydro (12.4%), faced closure due to high electricity costs and the expiry of its current power contract with AGL Energy at the end of 2028. Under the agreement, Tomago Aluminium will enter into a 10-year power purchase agreement for electricity supply through to 2038, with power sourced from 100% renewable sources from 2033. Tomago Aluminium will invest A$1.1 billion in the smelter through 2038, including A$100 million for decarbonisation initiatives. The deal is expected to underpin almost 3 gigawatts of new renewable generation and will reduce the smelter's Scope 1 and 2 carbon emissions by 7.1 million tonnes per year. The smelter, which produces up to 590,000 tonnes of aluminium annually (almost 40% of Australia's production), directly employs around 1,000 people and supports an estimated 5,000 indirect jobs. Prime Minister Anthony Albanese and NSW Premier Chris Minns welcomed the agreement, which follows a similar support package for Rio Tinto's Boyne smelter in Queensland in March 2026. The deal is part of a broader trend of Australian government support for energy-intensive industries, including previous packages for Glencore's Mount Isa copper smelter and Trafigura's Nyrstar operations.