MELBOURNE: The owners of Australia’s biggest aluminium smelter, including Rio Tinto Group, secures a government bailout of A$2.5bil (US$1.8bil) to keep the plant operating as they grapple with high energy costs.
Majority owner Rio and its partners at the Tomago smelter in New South Wales secured financial support from both the federal and state governments, which will see the venture invest A$1.1bil in the facility, according to a government statement.
The venture will also make the plant more flexible, so that it can reduce power consumption at times of high demand on the grid.
The bailout was first reported on Wednesday, without financial details.
Electricity costs have strained aluminum smelters around the world, forcing some operators to shut facilities or reduce output, as competition intensified from lower-cost, subsidised plants in China.
Rio has previously said electricity accounts for more than 40% of Tomago’s operating costs, and Prime Minister Anthony Albanese pledged financial support in December, after Rio warned that soaring costs could force the plant to close when its existing power-supply contract expires later this decade.
Tomago is Australia’s biggest single electricity user, consuming more than 10% of the power in New South Wales, the most populous state. — Bloomberg
