More than 1,000 jobs at the Tomago aluminium smelter near Newcastle have been secured following a significant intervention by the Australian federal government. The government has pledged taxpayer support to provide cheaper, renewable energy, ensuring the smelter’s continued operation amidst rising energy costs.
Rio Tinto, the majority owner of the Tomago smelter, had previously warned of potential shutdowns due to unsustainable energy expenses. However, on Friday, a breakthrough agreement was announced, promising to maintain operations by leveraging taxpayer funding to supply the smelter with affordable power.
Prime Minister Anthony Albanese emphasized the importance of sustaining domestic manufacturing, stating, “It’s important we as a nation continue to make things here, and the program that we’ve been working on to ensure that long-term future, by giving security going forward.”
Government and Industry Collaboration
The specifics of the agreement remain undisclosed, but the plan involves the New South Wales government providing additional support. The arrangement will also underwrite new renewable energy generation, storage, and transmission projects, although the total cost is yet to be finalized, according to Industry Minister Tim Ayres.
Tomago, which began production in 1983, is a key player in Australia’s aluminium industry, producing over a third of the nation’s aluminium output. The smelter is the largest single electricity consumer in Australia, accounting for about 10 percent of New South Wales’ power supply. Electricity costs represent 40 percent of Tomago’s operational expenses, making the new deal vital for its sustainability.
Industry Reactions and Historical Context
The Australian Workers’ Union (AWU) has praised the government’s intervention. AWU national secretary Paul Farrow described the development as “a pivotal moment for Australian manufacturing,” highlighting Tomago as a critical test case for the country’s manufacturing future.
This announcement follows a series of government initiatives aimed at supporting smelters nationwide, as escalating energy costs have threatened their viability. In October, a $600 million joint support package was agreed upon by the federal and Queensland governments for a copper smelter in Mt Isa. Earlier, the Commonwealth, South Australian, and Tasmanian governments allocated $135 million to sustain Nyrstar’s lead and zinc smelters, with part of the funds directed towards expanding production into critical minerals like antimony.
Looking Ahead
Tomago Aluminium has expressed its approval of the agreement, which it attributes to “constructive engagement” between the smelter’s owners and government bodies. Jerome Dozol, Tomago Aluminium’s chief, stated, “Today’s development represents a significant milestone in our ongoing engagement with many stakeholders working towards this shared goal.”
He further commented, “It reflects our collective recognition of the importance of maintaining local manufacturing capability in Australia. We look forward to working collaboratively with government on this next phase.”
The move represents a broader governmental strategy to stabilize and invigorate Australia’s industrial sector, particularly in the face of global energy challenges. As the details of the agreement unfold, stakeholders remain hopeful that this will mark a new era of sustainable manufacturing powered by renewable energy.
