UK-Australian producer Rio Tinto may shut its 600,000 t/yr Tomago aluminium smelter in New South Wales (NSW) at the end of 2028 over unsustainably high energy costs, despite support offers from the government.
The company has not made any decision about the future of the smelter, it said in a statement on 28 October.
Tomago's current electricity supply agreement ends in 2028. Rio Tinto has been looking for a new energy option since 2022 but has not been able to find a solution that would support sustainable operations at the smelter, it said.
Rio Tinto has been talking to Australian government officials over energy cost support for the smelter since June.
The Australian federal and NSW government have offered Rio Tinto support packages to Tomago but have not been able to reach an agreement, Australia's minister for industry and innovation Tim Ayres said at a press conference today. Rio Tinto declined to comment on the matter.
Australia's federal and NSW governments will continue to work with Rio Tinto on supporting Tomago. "I am very focused, despite this being challenging news today, on exhausting every opportunity to secure new power purchasing agreements for that facility," Ayres said.
Tomago uses 850MW of power and accounts for 12pc of NSW's total generation. The state's spot electricity prices averaged A$128.16/MWh (US$83.40/MWh) in 2024–25, up from A$101.57/MWh in 2023–24 and just A$35.17/MWh a decade ago.
Tomago is not the only Australian smelter facing severe cost challenges. Rio Tinto may close its 190,000 t/yr Bell Bay aluminium smelter, in Tasmania, over high electricity costs.
Tasmania's state government has called on the federal government to support Bell Bay — which mostly runs on hydropower — through its A$2bn low-carbon aluminium production tax credits.
