The Australian Government and the NSW Government have confirmed they are working with Tomago Aluminium on options to support the smelter’s operations beyond 2028, when its existing electricity supply agreement expires.
The discussions are focused on identifying a long-term pathway for reliable and competitively priced energy to support the continued operation of Australia’s largest aluminium smelter, located at Tomago, west of Newcastle.
Tomago Aluminium has welcomed the announcement, describing it as the result of constructive engagement with both levels of government as it prepares for the end of its current power contract with AGL in December 2028.
Fixed-price renewable energy central to negotiations
Over the coming months, Tomago Aluminium will work with the Commonwealth and NSW governments to assess a long-term renewable energy solution that can underpin the smelter’s future operations.
The proposed approach includes the potential for a fixed-price power purchasing agreement, alongside concessional finance arrangements intended to support the development of renewable energy generation and storage projects in NSW. Governments have said this work is aimed at improving energy reliability for heavy industry in regions such as the Hunter.
Climate Change and Energy Minister Chris Bowen said access to affordable renewable electricity is critical to the smelter’s future.
“Tomago Aluminium has made it clear: to remain competitive and secure its future the smelter needs a reliable and affordable supply of renewable energy, with ageing coal-fired power options being prohibitively expensive.”
Investment commitments linked to long-term certainty
As part of a successful agreement, Tomago Aluminium has committed to contributing at least $1 billion in capital and major maintenance investment over the next decade. This investment would support continued operations at the site and include work to identify further opportunities to reduce emissions.
Founded in 1983, Tomago Aluminium produces up to 590,000 tonnes of aluminium each year, accounting for almost 40 per cent of Australia’s annual aluminium production. The smelter is independently managed and owned by Rio Tinto, Gove Aluminium Finance Ltd and Norsk Hydro.
The facility directly employs around 1,000 people, alongside approximately 200 full-time equivalent contractors, and supports an estimated 5,000 indirect jobs across the region.
Industry continuity and workforce certainty
The Federal Government has framed the negotiations as part of a broader effort to provide certainty for energy-intensive industries as Australia’s electricity system changes.
Prime Minister Anthony Albanese said the discussions are intended to provide clarity for workers and the Hunter community.
“My government is working together with the NSW State Government and Tomago Aluminium on a new energy agreement that will secure the future of the facility.”
Industry Minister Tim Ayres said as the smelter plays an important role in the Hunter and in Australia’s aluminium supply chain, that the government is examining available options to support its continuation.
Tomago Aluminium response
Tomago Aluminium Chief Executive Officer Jerome Dozol said the company supports the collaborative approach taken to address the smelter’s future energy needs.
“We are grateful to both the Federal and New South Wales Governments for their commitment and partnership in working to address our energy challenges.”
He said the company is preparing to work with government as discussions move into the next phase, with a focus on maintaining manufacturing activity at the Tomago site.
Further details of any agreement are expected to emerge as negotiations progress in the months ahead.
