Tomago Aluminium, Australia’s largest aluminium smelter and a major Rio Tinto joint venture, has begun consultation with employees on the future of its operations.
The consultation process with workers and union representatives will run until November 21, allowing for feedback on the potential closure before a final decision is reached.
The move comes after a comprehensive market-sounding process, which began in 2022, was unable to identify an economically viable energy solution for when its existing electricity supply contract with AGL expires in December 2028.
Located 13km west of Newcastle, the plant produces up to 590,000 tonnes of aluminium a year, accounting for almost 40 per cent of Australia’s annual aluminium production.
The smelter is a massive baseload energy consumer, with electricity accounting for nearly half of its current operating costs.
According to the company, market proposals received to date for both coal-fired and renewable energy options show a significant cost increase from January 2029. This increase would “fundamentally change operating economics and leave the smelter unviable”.
Tomago Aluminium chief executive officer Jérôme Dozol said that while no decision has been made, the smelter has reached a critical point.
“We continue to engage with stakeholders on a viable pathway for Tomago,” Dozol said.
“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.”
Tomago is an independently managed joint venture owned by Rio Tinto (51.55 per cent), Gove Aluminium Finance Ltd (36.05 per cent), and Norsk Hydro (12.40 per cent).
