Rio Tinto–backed Tomago Aluminium has begun consulting employees and unions on the future of its smelter operations as it continues to seek a commercially viable long-term energy solution.
Located north of Newcastle, the smelter employs more than 1000 full-time staff members as well as about 200 contractors that come from across the Hunter Valley and Central Coast – “travelling from as far as 100km south, 80km north and 50km west of the plant”, according to the company.
“Ensuring that our people are safe while they are at work is one of the main drivers of our business,” Tomago’s website states.
The consultation, open until 21 November, follows a three-year market-sounding process to secure affordable electricity beyond the expiry of Tomago’s current supply contract in December 2028. In a statement released this week, Tomago said despite extensive engagement with energy providers, the company has not yet identified an option that would support sustainable operations beyond that date.
Electricity makes up more than 40 per cent of Tomago Aluminium’s operating costs.
“Based on market proposals received to date, the cost of both coal-fired and renewable energy options from January 2029 would increase significantly, fundamentally changing operating economics and leaving the smelter unviable,” the statement said.
Chief executive officer Jérôme Dozol said the company remains focused on engaging with stakeholders on a viable pathway for Tomago.
“Unfortunately, all market proposals received so far show future energy prices are not commercially viable, and there is significant uncertainty about when renewable projects will be available at the scale we need,” Dozol said.
“While no decision has been made, this is a difficult point to reach. Our focus remains on operating safely and giving our people certainty as soon as possible.”
The consultation process will provide employees and union representatives with the opportunity to share feedback before any decision is made about the smelter’s future.
Founded in 1983, Tomago Aluminium is Australia’s largest aluminium smelter, producing up to 590,000 tonnes of aluminium a year, amounting to around 40 per cent of the nation’s total output.
The company is an independently managed joint venture owned by Rio Tinto (51.55%), Gove Aluminium Finance Ltd (36.05%), and Norsk Hydro (12.40%).
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