Australia's Largest Aluminium Smelter to Go Renewable by 2033 2026

Australia's largest aluminium smelter is set to run entirely on renewable energy by 2033 after Rio Tinto struck a $2.5bn taxpayer bailout deal with the federal and NSW governments. The agreement, announced at the Tomago smelter near Newcastle, secures a 10-year below-market power supply guarantee starting after the existing coal-focused contract with AGL ends in December 2028.

The $2.5bn Deal to Secure Tomago's Future

This landmark subsidy package is designed to prevent the potential closure of the smelter, which directly employs about 1,000 people and indirectly supports roughly 5,000 more. The governments claim the deal will underpin nearly 3,000 megawatts of new renewable and firming capacity in New South Wales—more than a giant coal station.

Rio Tinto, a joint owner, has committed to invest $1.1bn in Tomago over the next 12 years, including $100m for decarbonisation activities. The company's aluminium and lithium chief executive, Jérôme Pécresse, stated that the smelter now has a pathway to long-term, cost-competitive, low-carbon power.

How the Renewable Transition Works

By 2033, the smelter will operate solely on clean energy, cutting its annual greenhouse gas emissions by 7.1 million tonnes—equivalent to 1.5% of Australia's total climate pollution. This transition is part of a broader trend where the Albanese government has provided bailout packages to major industries, including $2bn for Rio Tinto's Boyne smelter and $2.4bn for Whyalla steelworks.

Aluminium production is highly energy-intensive, and Australian smelters have historically relied on cheap long-term power deals. Tomago is the country's largest single electricity user, consuming more than 10% of NSW's total generation.

Comparison: Coal vs. Renewable Power for Tomago

Key Takeaways

• Rio Tinto secures $2.5bn government subsidy to keep Tomago operating.
• Smelter to run on renewables by 2033, cutting emissions by 7.1m tonnes annually.
• Deal supports 1,000 direct jobs and 5,000 indirect roles.
• Investment of $1.1bn includes $100m for decarbonisation.
• Part of broader government bailouts for energy-intensive industries.

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