The Australian government has offered support to British-Australian producer Rio Tinto in the operation of its Tomago aluminum plant with a capacity of 600,000 tons of aluminum per year after 2028 as part of a long-term electricity purchase agreement.
Rio Tinto subsidiary Tomago Aluminum will cooperate with the Australian Federal Government and the Government of New South Wales. (New South Wales) Governments will discuss an energy solution in the coming months to support a 600,000-tonne-a-year smelter from 2028, Australian Prime Minister Anthony Albanese said today.
The deal will include an agreement to purchase electricity at a fixed price and Tomago Aluminum's commitment to invest 1 billion Australian dollars ($670 million). for 10 years, he added.
A long-term electricity purchase agreement is in the best interests of continuing long-term investments in the industrial future of Tomago, Australian Minister of Industry and Innovation Tim Ayres said at a press conference. But Ayres declined to comment further on the specifics of the deal.
Rio Tinto warned in October that it might have to close Tomago at the end of 2028, when its current electricity supply contract expires due to unacceptably high energy prices. At that time, the company had been looking for a new energy solution since 2022, but it was still unable to find one.
In June, the company began negotiations with the authorities of the state of New South Wales and federal officials on energy cost support for Tomago.
The plant will operate normally during 2025. In January-September, the Tomago plant produced 426,000 tons of aluminum in terms of 100%, which is 2.2% less than a year earlier.
Australia supported Tomago the day after Tim Ayres defended the government's industrial policy results. Industrial policy is "a rational, pragmatic response to the acute challenges of our time," he said in a speech at the Sydney Institute on December 11.
Government support packages for Whyalla steelworks, the global manufacturer of Glencore. . Copper production facilities in Queensland and a global producer . Nyrstar's lead and zinc plants have been informed of their commitment to preserve and strengthen the economic environment for Australian workers, he added.
The government may also provide support to another Rio Tinto aluminum smelter. Tasmanian state officials called on the federal government to support the Bell Bay aluminum plant with a capacity of 190,000 tons per year by subsidizing low-carbon production in November.
