SYDNEY, Oct 29 (NNN-AAP) – Mining giant, Rio Tinto, said yesterday that, Australia’s largest aluminum smelter could be shut down in 2028, due to rising electricity costs.
Rio Tinto said in a statement that, it has started a consultation process with employees, on the operating future of the aluminum smelter in Tomago, 130 km north of Sydney.
Tomago Aluminium, which is 51.5 percent owned by Rio Tinto, produces up to 590,000 tonnes of aluminum every year, equating to almost 40 percent of Australia’s annual national production.
Rio Tinto said that, a comprehensive market-sounding process that began in 2022 has yet to identify a pathway that supports commercially sustainable operations for the smelter, after its current electricity supply contract expires in 2028.
It said that, electricity accounts for over 40 percent of current operating costs, and that proposals indicate the cost of both coal-fired and renewable energy options from Jan, 2029, would increase significantly, leaving the smelter unviable.
“As a result, Tomago Aluminium has reached a point where it must contemplate ceasing operations at the end of its current electricity supply contract,” it said.
Employees and trade union representatives have been given until Nov 21, to share feedback with the company, before a final decision is made.
Responding to the announcement, Australia’s Minister for Industry and Innovation, Tim Ayres, said, the federal government would exhaust every opportunity, to secure the future of the smelter.– NNN-AAP
