Latest news with #Tomago
Daily Mail
23 minutes ago
- Business
- Daily Mail
Australia's biggest aluminium smelter on verge of collapse putting up to 6000 jobs in jeopardy
Australia's biggest aluminium smelter is in crisis talks with the federal and state governments to continue operating as crippling electricity bills threaten 6,000 jobs. Tomago, which is majority owned by mining giant Rio Tinto, is negotiating on the design of its 2026 to 2029 electricity contract, The Australian Financial Review revealed last week. The Newcastle smelter employs 1,200 people full-time but its possible closure would joepardise the future of another 5,000 workers in the Hunter region, north of Sydney. Australia's key aluminium smelter, which opened in 1983, is now seeking support from the NSW and federal governments to stay afloat as Australia's only manufacturer of long-steel, in Whyalla, is propped up by the South Australian government. The latest development comes a week after Donald Trump doubled tariffs on Australian steel and aluminium to 50 per cent. Sydney radio 2GB broadcaster Ben Fordham suggested taxpayers could be stumping up billions of dollars just to keep Tomago afloat. 'This is not good: Tomago Aluminium, Australia's biggest smelter is on the verge of collapse,' he said on Tuesday. 'Why? Their power bill is too high. They're in emergency talks with state and federal governments asking for billions of dollars just to stay open. And if it shuts, well, we're not just losing a smelter, we're risking 6,000 jobs. 'There are thousands of families, contractors, supplies and regional businesses on the line.' Rio Tinto, which owns 51.55 per cent of Tomago Aluminium Company, in January welcomed Prime Minister Anthony Albanese's Future Made in Australia plan to provide production credits to alumunium manufacturers. Chief executive Kellie Parker also begged for federal government help to pay for sky-high electricity bills. 'The Australian government's commitment shows strong confidence in domestic manufacturing and the nation's position in the global economy,' she said. 'As traditional energy sources for heavy industry become increasingly uncompetitive, today's announcement is a critical piece in helping future-proof the industry. 'Such support is crucial for sustaining and growing regional economies.' The smelter's big shareholder Rio Tinto also flagged a bailout package from the NSW government to keep Tomago operating. 'Rio Tinto also welcomes ... looks forward to working with the New South Wales Government to help secure the future of that operation,' it said in a media release. Tomago, which is majority owned by mining giant Rio Tinto, employs 1,200 people full-time but its possible closure would jeopardise the future of another 5,000 workers in the Hunter region north of Sydney Rio Tinto also owns the Boyne Smelter in central Queensland, which last year received subsidies from the state government to transition to renewable energy. Albanese in January visited the Tomago plant with the Labor member for the then marginal seat of Paterson, Meryl Swanson. 'This is my third visit to Tomago, because this is such an important facility,' he said. 'And essentially it's about people, it's about the jobs that are created here. Up to a thousand direct jobs. 'But when you look at this local community, there's 5,000 jobs depend on this facility just locally. But more importantly than that, it's the tens of thousands of jobs throughout Australia that depend on us being able to make things here.'
Sky News AU
5 hours ago
- Business
- Sky News AU
Chris Bowen's energy revolution pushing Australia's heavy industry to the brink with Tomago Aluminium on the verge of collapse
Australia's largest aluminium smelter is on the brink of collapse under the weight of soaring power prices as Energy Minister Chris Bowen continues with his renewables revolution. A report in the Australian Financial Review emerged on Friday that said Rio Tinto-owned Tomago, Australia biggest aluminium producer, is seeking billions of dollars in public funds to avert collapse as energy costs plague local industry. The producer is located north of Newcastle, uses about 10 per cent of NSW's power supply and makes about 37 per cent of Australia's primary aluminium. The collapse of the massive company could lead to more than 1,000 people losing their jobs, while 5,000 indirect workers could suffer. Tomago executives have reportedly asked the NSW and federal governments for assistance amid crippling power prices and as cost-effective and consistent renewables remain largely unavailable. The damning report sparked concern from the Centre for Independent Studies' senior policy analyst Zoe Hilton who said the government's energy policy was crippling the aluminium sector. 'With power prices in Australia rising higher and higher, it simply doesn't make financial sense to run a smelter here,' Ms Hilton told 'Tomago's current predicament is a direct result of state and federal government plans to shift our grid to mostly intermittent energy sources.' Mr Bowen and Labor have vowed to make the nation a 'renewable energy superpower' with an energy mix of 82 per cent renewables by 2030 and green energy driving local manufacturing. The Albanese government is looking to boost this through production tax credits for leading Australian aluminium smelters, including Tomago, and give $2 billion back to help with the energy transition. A federal government source told the AFR it was involved in discussions with Tomago over the details of the tax credit design as it looks to alleviate the impacts of soaring power costs. Rio Tinto's chief executive Jakob Stausholm flagged concerns about the producer's electricity costs earlier this year where he warned power price contracts beyond 2028 would render Tomago unviable. Ms Hilton said this should come as a brutal warning for the government as it strives to dramatically alter the nation's energy mix. 'The federal government has refused to acknowledge that its plan to make our grid run off 82 per cent renewable energy by 2030 is making energy unaffordable for industrial users, not to mention residential and small business consumers,' Ms Hilton said. 'We are following in the footsteps of Germany, which gets almost half of its power from wind and solar. 'Around 40 per cent of German industrial companies are now considering partly or fully relocating operations abroad due to a lack of affordable and reliable energy. Australia has only just reached over 30 per cent wind and solar. 'We don't have European neighbours with nuclear plants from which to import reliable power as Germany does, so our industries will feel the pain of expensive, unreliable power much earlier in the renewables buildout.' Shadow energy minister Dan Tehan said Labor's ambitious renewables plan could result in job losses at Tomago. 'Spare a thought for the workers at Tomago worried about losing their job because high energy prices, as a result of Labor's obsession with renewable energy, is threatening their livelihood,' Mr Tehan told 'These workers will be worried today about paying the bills and putting food on the table if Tomago is closed because of Labor's higher energy costs. 'Every worker and every business owner in Australia will be looking at Tomago and worrying if their business can survive the exorbitant energy costs under Labor's renewables agenda.' Tomago's turmoil comes as the government looks to shift the aluminium industry to renewable energy while maintaining the operations of the major smelters. The producer was historically powered by cheap coal-fired generators but the shift away from fossil fuels has presented challenges regarding both energy security and power prices. Ms Hilton said Australia needs to ditch the renewables plan if the nation wants to keep heavy industry from moving overseas. 'If we want to minimise electricity costs, new coal plants will be the cheapest way to supply our grid,' Ms Hilton said. 'If industry remains committed to reducing emissions, nuclear plants are the only option to provide the necessary 24/7 power at an affordable price, so the bans will need to be lifted.' Tomago CEO Jerome Dozol in November 2024 said the company urgently needed public help to assist with the smelter's energy bills. 'The price of electricity on offer is too expensive for us to keep operating without government intervention,' Mr Dozol said.
Mint
3 days ago
- Business
- Mint
Rio Tinto Eyes Bailout for Australian Aluminum Smelter, AFR Says
(Bloomberg) -- Rio Tinto Group is seeking a multibillion-dollar government bailout for its Tomago aluminum smelter — Australia's largest electricity user — due to spiraling energy costs, the Australian Financial Review reported. The talks center on the smelter's electricity contract for 2026 to 2029 and the federal government's production tax credits, the newspaper reported Saturday, citing unidentified sources familiar with the discussions. One person interviewed by the AFR said any bailout package will likely be 'more sophisticated' than a direct subsidy and that talks are mainly being conducted with the New South Wales state government. Tomago, majority-owned by Rio, uses about 12% of New South Wales' power supply, according to the world's second-biggest mining company. It's aiming for renewables to contribute to more than 50% of the smelter's electricity needs by 2030, and aspires to eradicate fossil fuels from the plant by 2035. The smelter is Australia's biggest aluminum producer, generating up to 590,000 tons a year. A request for comment sent to Rio out of working hours wasn't immediately answered. Australian Prime Minister Anthony Albanese in January announced A$2 billion ($1.3 billion) in funding to create Green Aluminum Production Credits to help the nation's smelters switch to renewable energy before 2036. Prices of the verstaile, lightweight metal have been volatile amid President Donald Trump's tariff agenda, and are down 4% since the start of the year. This week, the US leader doubled levies on aluminum imports to 50%. Albanese, whose center-left Labor government was re—elected last month, has described Trump's move as 'an act of economic self harm by the United States that will increase the cost for consumers' in the US. More stories like this are available on
Bloomberg
3 days ago
- Business
- Bloomberg
Rio Tinto Eyes Bailout for Australian Aluminum Smelter, AFR Says
Rio Tinto Group is seeking a multibillion-dollar government bailout for its Tomago aluminum smelter — Australia's largest electricity user — due to spiraling energy costs, the Australian Financial Review reported. The talks center on the smelter's electricity contract for 2026 to 2029 and the federal government's production tax credits, the newspaper reported Saturday, citing unidentified sources familiar with the discussions. One person interviewed by the AFR said any bailout package will likely be 'more sophisticated' than a direct subsidy and that talks are mainly being conducted with the New South Wales state government.
