Australia steps in to secure future of Rio Tinto–backed Tomago aluminium smelter

Australia has taken a decisive step to safeguard the future of its biggest aluminium smelter, with the federal and New South Wales governments committing to work alongside Tomago Aluminium on a long-term energy deal to keep the plant running beyond 2028.

The collaboration comes at a critical moment. Tomago Aluminium, majority owned by Rio Tinto, had warned earlier this year that the 42-year-old operation could face closure once its electricity contract with AGL Energy expires. Despite exploring alternatives since 2022, the smelter had been unable to identify a viable energy arrangement that would keep production economically feasible.

Prime Minister Anthony Albanese, speaking on Friday, stressed the national importance of keeping the smelter operational. “This is vital for our national interest,” he said. “Australia must continue to make things here, and Tomago plays a central role in our manufacturing capability.”

Under the proposed framework, both levels of government will support the development of a fixed-price power-purchasing agreement, underpinned by new renewable-energy generation and storage projects in New South Wales. The effort aims to help Tomago manage spiralling electricity costs, which currently represent more than 40% of its total operating expenses. As the largest single consumer of electricity in NSW, the smelter’s long-term stability has wider implications for the state’s energy ecosystem.

If the deal moves forward, Tomago Aluminium has committed to investing at least AUD 1 billion over the next decade to modernise operations and strengthen supply security.

Chief Executive Jerome Dozol welcomed the partnership, saying it reflects a shared acknowledgement of the importance of sustaining local manufacturing. Tomago, a joint venture between Rio Tinto, Gove Aluminium Finance, and Norsk Hydro, produces nearly 40% of Australia’s aluminium output, making its continued operation a matter of strategic economic significance.