By Rhiannon Hoyle
DOW JONES–Australia’s largest aluminum smelter, controlled by Rio Tinto, may have to cease operations when its current power supply contract expires in 2028 due to rising electricity prices. Tomago Aluminum said Tuesday that the company has “reached a point where it must consider ceasing operations at the end of its current power supply agreement.” Rio Tinto holds around 52 percent of Tomago Aluminum
The smelter has been looking for an “economically viable energy solution” since 2022 to replace its existing electricity supply contract with Australian energy supplier AGL Energy when it expires, as Tomago announced on its website. However, the company has not yet found an option that would allow operations to continue beyond 2028.
Rising energy costs are putting a strain on energy-intensive smelters in many parts of the world. In Australia, government officials recently announced support for Glencore’s Mount Isa copper smelter and Townsville refinery, among other projects.
At Tomago, electricity accounts for more than 40 percent of ongoing operating costs and the smelter is the single largest consumer of electricity in New South Wales, Australia’s most populous state.
“Unfortunately, all market proposals received to date indicate that future energy prices are not economical, and there is significant uncertainty as to when renewable energy projects will be available at the scale we need,” said Tomago Aluminum CEO Jerome Dozol, according to the statement.
No decision has yet been made about the future of the hut, said Dozol. The company is talking to all of its “stakeholders about a viable path for Tomago” and has begun surveying employees. This process is scheduled to last until November 21st.
Tomago Aluminum is a joint venture between Rio Tinto, the Australian leasing company Gove Aluminum Finance, which holds 36 percent of the shares, and Norway’s Norsk Hydro, which has a stake of around 12 percent. The smelter has been operational since 1983 and can produce up to 590,000 tonnes of aluminum annually, accounting for almost 40 per cent of Australia’s production.
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(END) Dow Jones Newswires
October 28, 2025 02:05 ET (06:05 GMT)
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