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.

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

Prime Minister Anthony Albanese in January visited the Tomago plant with the Labor member for the then marginal seat of Paterson, Meryl Swanson

‘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.’

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