Rio Tinto said on Tuesday that its Tomago aluminium smelter in New South Wales has initiated a consultation process with employees on the operational outlook due to the continuous pressure of high electricity prices.
The mining group added, "In light of this, Tomago Aluminium is now facing the situation where it must consider ceasing operations after the current power supply contract expires."
The company said that since 2022, Tomago Aluminium has implemented a comprehensive market consultation process aimed at finding an economically viable energy solution when its existing power supply contracts expire
Plan. Despite extensive contacts and market exploration, Tomago has yet to find a path that can support commercially sustainable operations after 2028.
Finding energy sources with competitive prices remains a core challenge. Currently, electricity costs account for more than 40% of Tomago Aluminium's operating costs. Based on the market proposals received so far, starting from January 2029, there will be no
Whether it is coal-fired power generation or a renewable energy solution, the cost will increase significantly, which will fundamentally change the economic viability of the operation and lead to the inability of the smelter to sustain its business.
Therefore, Tomago Aluminium has reached a point where it must consider ceasing operations when its current power supply contract ends.
No final decision has been made regarding the future of the refinery yet. This consultation process will last until November 21st, providing an opportunity for employees and union representatives to share their feedback on this potential path before a decision is made
See you.
Jerome Dozol, the CEO of Tomago Aluminium, said: "We continue to work with various stakeholders to find a feasible path for Tomago." Unfortunately, all the market proposals received so far indicate that future energy prices are commercially unfeasible, and there is also significant uncertainty as to when renewable energy projects can be put into use at the scale we need.
Although no decision has been made yet, it has been difficult to get to this point. Our focus remains on safe operation and to provide our employees with a definite answer as soon as possible.
Supplementary information
Tomago Aluminium was established in 1983 and is the largest aluminium smelter in Australia, with an annual aluminium production of up to 590,000 tons - accounting for almost 40% of Australia's annual aluminium output.
Tomago Aluminium is an independently managed joint venture jointly owned by Rio Tinto (51.55%), Gove Aluminium Finance Ltd (36.05%) and Norsk Hydro (12.40%).
The smelter is located in Tomago, New South Wales, about 13 kilometers west of Newcastle.
Tomago Aluminium's current power supply contract with AGL will expire in December 2028.
