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More than 1,000 jobs on the line as aluminium smelter faces closure over soaring energy costs Tomago Aluminium could close by end of 2028 Future energy prices 'not commercially viable' By AAP and KYLIE STEVENS, SENIOR BREAKING NEWS REPORTER, AUSTRALIA Published: 00:31 GMT, 28 October 2025 | Updated: 01:05 GMT, 28 October 2025 More than 1000 jobs are at risk as Australia's biggest aluminium smelter begins talks over its potential closure. Tomago Aluminium, which is majority owned by Rio Tinto, said that high energy costs has forced the company to consider ending its operations when its current electricity supply contracts expire in three years' time. The consultation process is set to run until November 21, as executives concede that the future of the site in the NSW Hunter region is uncertain. 'While no decision has been made, this is a difficult point to reach,' Tomago Aluminium's chief executive Jerome Dozol said on Tuesday. '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.' Federal Industry Minister Tim Ayres has vowed to 'exhaust every opportunity' to ensure the smelter remains open, including ongoing discussions with the NSW state government. 'Every government has an interest here. It's important in jobs terms and investment terms but it's also important (for) economic resilience and strategic terms,' he said. Soaring energy prices could force the closure of Tomago Aluminium - Australia's biggest aluminium smelter More than 1,000 jobs at Tomago Aluminium are under threat Local federal MP Meryl Swanson urged the NSW government to 'stay in the negotiation'. 'I would respectfully remind the state government that they have racked up royalties for many years off coal,' she said. 'Our region has continued to deliver and I would respectfully encourage premier mins to stay engaged in the negotiation. We need this negotiation to be successful.' Electricity already makes up more than 40 per cent of the company's operating costs, according to Tomago Aluminium. As its contract with AGL nears its December 2028 endpoint, future electricity supply options would significantly increase costs and leave the operation unviable. Tomago's smelter, located about 13km west of Newcastle, produces almost 40 per cent of Australia's aluminium every year and employs more than 1000 staff from the Hunter Valley and Central Coast regions. About 90 per cent of its product is exported to the Asia-Pacific region. Tomago has been seeking a lifeline from the federal and state governments after bailout packages for several other struggling refineries and smelters. Tomago Aluminium has blamed rising energy prices for the potential closure of its smelter in the NSW Hunter region Swiss mining giant Glencore in October received a $600million injection as part of a joint federal and state deal to keep Queensland's Mount Isa copper smelter and Townsville copper refinery open, securing about 600 jobs. Representatives for Tomago were previously in talks with the federal and NSW government over a bailout reportedly worth more than $1 billion. Bell Bay Aluminium in Tasmania, which is also owned by Rio Tinto, is facing a potential shutdown as a 10-year deal with Hydro Tasmania nears its December 31 deadline. Share or comment on this article: More than 1,000 jobs on the line as aluminium smelter faces closure over soaring energy costs Add comment
