CANBERRA: Rio Tinto Group is seeking a multi-billion-dollar government bailout for its Tomago aluminium smelter – Australia’s largest electricity user – due to spiraling energy costs, the Australian Financial Review reports.
The talks centre on the smelter’s electricity contract for 2026 to 2029 and the federal government’s production tax credits, the newspaper reported last Saturday, citing unidentified sources.
One person interviewed by the Auatralian newspaper said any bailout package would likely be “more sophisticated” than a direct subsidy the government and that talks are mainly being conducted with the New South Wales state government.
Tomago, majority-owned by Rio, uses about 12% of New South Wales’ power supply, according to the world’s second-biggest mining company.
The aluminium smelter is aiming for renewables to contribute to more than 50% of the smelter’s electricity needs by 2030, and aspires to eradicate fossil fuels from the plant by 2035.
The smelter is Australia’s biggest aluminium producer, generating up to 590,000 tonnes a year.
A request for comment sent to Rio wasn’t immediately answered.
Australian Prime Minister Anthony Albanese in January announced A$2bil (US$1.3bil) in funding to create Green Aluminum Production Credits to help the nation’s smelters switch to renewable energy before 2036.
Prices of the verstaile, lightweight metal have been volatile amid President Donald Trump’s tariff agenda, and are down 4% since the start of the year.
The US leader doubled levies on aluminium imports to 50%. — Bloomberg
