NEWCASTLE, Australia-- Tomago Aluminium has today started a consultation process with employees on the potential future of its operations.
Since 2022, Tomago Aluminium has undertaken a comprehensive market-sounding process to identify an economically viable energy solution for when its existing electricity supply contract expires. Despite extensive engagement and market approaches, Tomago is yet to identify a pathway that supports commercially sustainable operations beyond 2028.
Finding competitively priced energy remains the central challenge, with electricity accounting for more than 40 per cent of Tomago Aluminium's current 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.
As a result, Tomago Aluminium has reached a point where it must contemplate ceasing operations at the end of its current electricity supply contract.
A decision has not been made about the future of the smelter. The consultation process, which runs until November 21, provides employees and union representatives the opportunity to share feedback on this potential pathway before a decision is reached.
Tomago Aluminium Chief Executive Officer Jérôme Dozol said: "We continue to engage 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.
"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."
Additional information:
- Founded in 1983, Tomago Aluminium Company is Australia's largest aluminium smelter, producing up to 590,000 tonnes of aluminium a year - almost 40 per cent of Australia's annual aluminium production.
- Tomago Aluminium 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).
- The smelter is located at Tomago, NSW, approximately 13 kilometres west of Newcastle.
- Tomago Aluminium's existing electricity supply contract with AGL expires in December 2028.
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