Australian Government backs Rio Tinto’s Tomago Al smelter
Sydney (14 August)
The Federal Government and New South Wales (NSW) Government will support Rio Tinto’s Tomago aluminium smelter with A$2.5 billion of power subsidies to support continued production at the plant until the end of 2038.
But Tomago Aluminium – a Rio Tinto-led joint venture – will also pay the two Governments when aluminium prices are high, the NSW Government and Federal Government said in a joint statement on 13 August.
“Tomago Aluminium has made it clear: to remain competitive and secure its future, the smelter needs a reliable and affordable supply of renewable energy,” Federal Energy Minister Chris Bowen said.
The joint venture expects to sign a decade-long, Government-backed renewable power deal in late 2028, when its current non-renewable power deal expires, it said.
Tomago’s power deal will be subsidised and support close to 3 GW of renewable energy projects. “Making sure that we can deliver a power purchasing agreement here supported by the two Governments … will mean more investment,” Federal Industry Minister Tim Ayres told the ABC.
The NSW Government will contribute up to A$1.225 billion of subsidies over a decade, with the Federal Government covering the rest, the two Governments said. Tomago has also agreed to spend A$1.1 billion on smelter performance improvements, energy management projects, and decarbonisation initiatives, the joint venture said.
Tomago – which consumes 10% of New South Wales’ power supply – can cut its power use by 63% within minutes if needed.
Utilities plan to supply Tomago with entirely renewable energy from 2033 under the Government-backed deal, Rio Tinto said. The joint venture’s deal will cut its combined direct and power-related CO2-equivalent emissions by 7.1 million tonnes per year, Rio Tinto added.
The Federal Government’s Tomago subsidies come on the back of a string of similar smelter aid packages.
The Government has financially supported Glencore’s Mount Isa copper smelter, Rio Tinto’s Boyne aluminium smelter, GFG’s now-shuttered Liberty Bell Bay ferro-manganese smelter, and Nyrstar’s Tasmanian and South Australian zinc and lead smelters since the start of 2025.
Soon after the Federal Government announced its support for Tomago, the Tasmanian Government called on it to support Rio Tinto’s Bell Bay aluminium smelter with power subsidies.
“[The Federal Government] must explain why a [Tomago] deserves extraordinary support while Bell Bay is expected to go it alone,” Tasmanian Industry Minister Felix Ellis said. “Just as Tomago is too important to lose, Bell Bay is also too important to ignore,” Ellis added.
By Avinash Govind