- RIO
- RIO
Rio Tinto PLC has welcomed a long-term power agreement that will keep Australia’s largest aluminium smelter operating until 2038, backed by A$1.1 billion of <a href="https://bitcomme.com/energy-department-plans-investment-in-penn-state-mining-program/” title=”Energy Department plans investment in Penn State mining program”>investment and a transition to 100% renewable electricity from 2033.
The agreement between Tomago Aluminium, the Australian Government and the New South Wales Government provides a pathway for the smelter to remain internationally competitive after its existing electricity contract expires on December 31, 2028.
Tomago will enter a 10-year power purchase agreement (PPA) extending electricity supply through to 2038, with renewable sources supplying 100% of its electricity from 2033.
A$1.1 billion investment backs long-term operations
Under the arrangements, Tomago Aluminium will invest A$1.1 billion in real terms in the smelter between now and 2038, including A$100 million earmarked for decarbonisation initiatives.
Once the operation moves to 100% renewable electricity in 2033, Rio Tinto expects the change to reduce Tomago’s Scope 1 and 2 operating carbon emissions by 7.1 million tonnes annually.
Tomago is also New South Wales’ largest electricity user and will continue providing large-scale demand response services, allowing it to reduce consumption during periods of stress on the electricity system.
Rio Tinto Aluminium & Lithium chief executive Jérôme Pécresse said the agreement secured the smelter’s long-term future while supporting Australian manufacturing, skilled employment and supply certainty for customers.
“It means Australia keeps a critical piece of sovereign manufacturing capability, while helping Tomago Aluminium continue competitively producing the aluminium needed for the global energy transition,” Pécresse said.
Tomago central to Australian aluminium industry
Tomago Aluminium, around 13 kilometres west of Newcastle in New South Wales, has operated since 1983 and can produce up to 590,000 tonnes of aluminium annually, representing almost 40% of Australia’s aluminium production.
The operation directly employs around 1,000 people, alongside approximately 200 full-time equivalent contractors, and is estimated to support another 5,000 indirect jobs.
Rio Tinto owns 51.55% of the independently managed Tomago joint venture, with Gove Aluminium Finance Ltd holding 36.05% and Norsk Hydro owning the remaining 12.4%.
The agreement follows a similar arrangement reached in March 2026 for Rio Tinto’s Boyne aluminium smelter at Gladstone in Queensland.
With agreements now in place for Tomago and Boyne, Australia’s 2 largest aluminium smelters have pathways to long-term, lower-carbon electricity supplies beyond their existing power contracts, supporting Rio Tinto’s integrated Australian aluminium supply chain spanning bauxite mining, alumina refining and smelting.
