Tomago smelter consider closure as energy prices continue to rise

ABC NEWS (Australia)

The future of the nation's largest aluminium maker hangs in the balance with its owner, Rio Tinto, threatening to close the plant because of high power prices. The Commonwealth is now in crisis talks with the company and the New South Wales government preparing what could be the fourth big industry bail out this year.

Transcript

00:00Touring Tomago in January, no hint of the troubles brewing.

00:07We've got all our different products here.

00:09Ten months later, that shine is wearing off.

00:12Workers waking up to news this morning that after 40 years in operation, the plant could be closing.

00:18This will be very challenging news for them indeed.

00:22The country's largest aluminium producer, the Rio Tinto-owned smelter, is also Australia's largest energy user.

00:29Its power bill accounting for 40% of its costs.

00:33Its current contract runs out at the end of 2028.

00:36And after that, the company says power prices are set to soar.

00:41The energy price is a defining challenge for us.

00:45In recent weeks, the federal and state governments offered a secret support package.

00:50But the company knocked it back.

00:52An aluminium smelter like Tomago needs long-term, reliable and internationally competitive price.

01:01With a thousand workers now in limbo and a month of consultations ahead, the government and its Hunter region MPs are scrambling.

01:09If we lose something like that, you really have to start to question if we're going to be a country that actually makes things at all.

01:15Taxpayers are bailing out heavy industry across the country.

01:19The federal government together with South Australia tipping $2.4 billion into the Wyala Steelworks.

01:26Combining with Queensland to spend $600 million propping up Glencore's copper smelter.

01:32And jointly funding a $135 million bailout for Neastar's zinc and lead smelters in Tasmania and South Australia.

01:40Will the minister admit that Labor's energy policy is killing local jobs and local manufacturing in the Hunter?

01:48We continue to be in discussions with Rio and the state government on options for Tomago.

01:53Nothing is off the table.

01:55This goes to the heart of the energy transition.

01:57Renewables are not being built quickly enough and gas prices remain very high.

02:03The federal government says all options are on the table to save this smelter.

02:07But if Tomago does survive, the bottom line is taxpayers will almost certainly be on the hook.

02:14You'll be able to qualify...

02:15You can see these numbers of people on the table.

02:16... put the big instructions on the table.

02:17I'll show you how we're going to use that here as well.

02:18A few of the people on the table.

02:19And the people on the table are not special and are the people on the table.

02:20And the people on the table will not be with them.

02:21I'm sure they'll be able to run to the table.

02:22I'll show you how they are.

02:23And if they'll give you the money, can I have a little, that way,

02:24you'll be able to spend a little bit with them on the table.

02:26We also have a lot of power that can be done.

02:27That's what I think is.

02:28So, I hope that you've got a little bit with them now.

02:30You can see it somehow.

02:31And the other people on the table.

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