Australia commits $1.76 billion to keep Rio Tinto aluminium smelter open

Australia announced on Thursday that it would be providing A$2.5 billion (1.76 billion dollars) to help Rio Tinto keep its?Tomago aluminum smelter open beyond 2028.

A government statement stated that the deal would support the generation of 3 gigawatts for the smelter. The financial package was to be funded jointly by the federal government and the state of New South Wales.

Rio Tinto warned in October that Tomago - the largest electricity consumer in the country - could be forced to close down if it fails to secure commercially viable power beyond 2028.

Tomago has agreed to invest A$1.1 billion into the facility, which includes A$100 millions for further decarbonisation efforts at the smelter.

Tomago, like many other Australian smelters that struggled with high energy prices during the 'transition to renewables', was built in the last century to?take advantage? of cheap coal-fired electricity.

In December, the federal government announced that it was looking to secure a long-term energy supply at a fixed price for the smelter when its current contract expires in 2020. Tomago employs over?1,000 full-time employees and 200 contractors.

(source: Reuters)