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Australia's largest aluminium smelter is consulting with employees about the future of its operations as it struggles with rising energy costs. In a statement released this morning Tomago Aluminium said it was yet to identify a pathway that supported commercially viable operations beyond the expiration of its energy contract in 2028. The smelter, located north of Newcastle, employs more than 1,000 people and produces almost 40 per cent of Australia's annual aluminium output. The company said finding competitively priced energy remained a "central challenge". Tomago Aluminium is the country's largest single user of electricity and its energy costs account for more than 40 per cent of its operating costs. The company said the increased cost of coal-fired and renewable energy options from 2029 would render the smelter "unviable". For months the company's majority owner, Rio Tinto, has been in discussions with state and federal governments about interventions to avoid closure. The company said it had also engaged in a "market-sounding" process since 2022. But Tomago Aluminium chief executive Jérôme Dozol said none of the options presented would be enough to keep the smelter running. "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," he said. No final decision has been made about the smelter's future at this stage. Grim forecast from union Australian Manufacturing Workers' Union NSW secretary Brad Pidgeon said today's announcement was another blow for the manufacturing sector. "It's very disappointing for the workers and community by and large, but I think it really validates the sad news that's going to occur moving into the future," he said. The union has been in discussions with Tomago for the last 12 months about the smelter's future but Mr Pidgeon said no definite decision had been communicated to workers. "Today's announcement firms up that, unfortunately, the business is highly unlikely to operate post 2028," he said. Mr Pidgeon said he would like to see the government and Tomago come to the table and offer support for workers in the face of uncertainty. "The pressure of uncertainty really plays on the minds of workers," he said. "We want to see some sort of project fast-tracked to ensure that there are some jobs for workers in the Hunter, but more importantly making sure we have our communities looked after in the process as well." Mr Dezol said the company was committed to supporting its workers. "This is a difficult point to reach," he said. "Our focus remains on operating safely and giving our people certainty as soon as possible.”
