Australia’s largest aluminium smelter has secured its future, saving over 1,000 jobs, thanks to a government intervention ensuring operations extend beyond 2028.

Facing potential shutdown due to skyrocketing energy prices, Rio Tinto had previously indicated that its Tomago smelter in New South Wales’ Hunter Region might close when its coal power contract concludes in 2028.

Prime Minister Anthony Albanese revealed that a collaborative effort between the federal and NSW governments resulted in an agreement with the plant’s owners to supply renewable energy, enabling the smelter to continue its operations.

Located around 13 kilometers west of Newcastle, the Tomago smelter is a critical asset, producing nearly 40% of Australia’s aluminium output.

The smelter is predominantly owned by Rio Tinto, with Gove Aluminium Finance and Norwegian energy firm Norsk Hydro holding smaller stakes.

In late October, Rio Tinto disclosed that escalating energy costs posed a significant challenge in maintaining the plant’s economic viability beyond the current contract.

The company started consultations with the employees regarding the future of operations.

“We continue to engage with stakeholders on a viable pathway for Tomago,” Tomago Aluminium chief executive Jérôme Dozol said at the time.

“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.”