The potential billion-dollar bailout of Australia’s biggest aluminium smelter looks like “double standards”, according to a state Liberal government trying to keep its own facility operational.
Tomago Aluminium, which is majority owned by Rio Tinto, says high energy costs have forced the company to consider ending operations when its electricity supply contracts expire in 2028.
But federal government figures are desperate to keep the smelter running and Tomago has engaged with both it and state politicians over a bailout reportedly worth more than $1 billion.
That caught the eye of Tasmania’s Industry Minister, Felix Ellis, who says the federal Labor government has ignored calls from the Liberal-run state for a similar deal.
Bell Bay Aluminium in Tasmania, which is also owned by Rio Tinto, is facing a potential shutdown as a 10-year deal with Hydro Tasmania nears its December 31 deadline.
Mr Ellis said hundreds of Tasmanian jobs hang in the balance as the federal government failed to confirmed if Bell Bay would receive support.
“They are bending over backwards to support Tomago, reportedly considering a billion-dollar bailout, yet it won’t lift a finger to help Bell Bay Aluminium, the only renewable-powered smelter in the country,” he said.
“Tasmania has done the right thing, we’ve invested in renewable energy, we’ve backed our workers and we’ve fought to keep Bell Bay strong, but we cannot do it alone.”
Tomago produces almost 40 per cent of the nation’s aluminium and its struggles follow bailouts for several other smelters and refineries, including a multibillion-dollar package to save South Australia’s Whyalla steelworks.
Swiss mining giant Glencore in October received a $600 million injection as part of a joint federal and state deal to keep Queensland’s Mount Isa copper smelter and Townsville copper refinery open, securing about 600 jobs.
Tomago, which produces nearly 600,000 tonnes of aluminium a year, said electricity made up 40 per cent of operating costs.
Liberal Senator Susan McDonald, whose party is in the middle of its latest row over supporting net-zero emissions targets, said Labor’s “renewables-only agenda” was hurting industry.
“Ministers are refusing to accept reality in their pursuit of renewables madness,” she said.
“This abject failure of policy leaves our supply chains vulnerable, kills Australian jobs, and destroys our sovereign capability.”
Greens figures have argued bailing out large corporations was not the correct use of public cash.
The smelter, located about 13km west of Newcastle, employs more than 1000 staff from an area spanning from the Hunter Valley to the Central Coast.
About 90 per cent of its product is exported to the Asia-Pacific region.