Government deal to ensure Tomago Aluminium smelter remains open beyond 2028
Anthony Albanese met with Tomago workers before announcing the deal. (ABC News: Ben Clifford)
In short:
The prime minister has announced a deal is being finalised to keep the Tomago Aluminium smelter open beyond 2028.
The company had previously announced it was weighing up its future due to rising energy prices.
What's next?
The deal is set to be finalised in the new year.
The federal government will step in to ensure Australia's largest aluminium smelter remains open.
Tomago Aluminium in the NSW Hunter Valley announced in October it was weighing up its future amid rising energy prices.
The company, which is majority owned by mining giant Rio Tinto, said it was struggling to see how operations would remain commercially viable beyond the expiration of its energy contract in 2028.
Tomago Aluminium chief executive Jérôme Dozol said the price of both renewable and coal-fired power into the future would render the smelter "unviable".
Since then, Rio Tinto has been engaged in conversations with both state and federal governments about how to keep the smelter open beyond 2028.
Prime Minister Anthony Albanese visited the smelter near Newcastle today to meet with employees.
Anthony Albanese and Tim Ayers told workers a deal will be finalised soon. (ABC News: Ben Clifford)
Workers have been told talks are ongoing between the company, state and the Commonwealth to find an energy solution, with details to be finalised in the new year.
Mr Albanese said the deal was important for the company and its employees, and also Australia.
"This is an investment," he said.
"If Australia doesn't produce aluminium, then the knock-on effect to other industries is significant."
Federal Minister for Industry and Innovation Tim Ayres said a long-term power purchasing agreement was being finalised.
"This deal will underwrite the development of more electricity, more generation, more storage, more transmission for this facility, but also to deliver lower costs for households and business," he said.
Mr Ayres would not confirm what projects might be fast-tracked to achieve the deal.
"We'll have lots more to say over the coming weeks and months about the details," he said.
"This is a complex set of arrangements. It involves a partnership between the firm here, the Commonwealth and NSW.
"There are benefits and costs for all of us in this process."
Tomago is the largest producer of aluminium in Australia. (ABC News: Ben Clifford)
The minister would not provide details about how much the deal would cost taxpayers.
"I won't be oversharing the details of this," he said.
"Suffice to say there are costs and benefits that accrue to NSW and the Commonwealth and Tomago Aluminium.
"There's a set of national interest questions here and local questions, but a long-term power purchasing agreement is in the interest of continued long-term investment in the industrial future of this facility."
'Shot in the arm for the Hunter'
The facility employs more than 1,000 people and produces almost 40 per cent of Australia's annual aluminium output.
The news of a power deal was welcomed by workers, including Gary Fleming who has worked at Tomago for 33 years.
Gary Fleming has worked at Tomago Aluminium for more than three decades. (ABC News: Ben Clifford)
"It's a shot in the arm for the Hunter and it makes sure we've got manufacturing first and foremost," he said.
"To have jobs going forward is massive."
Mr Fleming said if Tomago was to close, it would have a wider impact than just the workers directly employed at the smelter.
"We've got a contractor group attached to Tomago," he said.
"It's a sizeable workforce around 4,000, so we've got suppliers, contractors, as well as our own people."