NSW confirms rescue talks for Tomago aluminium smelter

State and federal Labor governments are under mounting pressure to prevent the collapse of one of Australia’s largest manufacturers.

Prime Minister Anthony Albanese speaking to workers at Tomago Aluminium. Picture: NewsWire/ Adam Yip

NSW Premier Chris Minns has confirmed that his government is in discussions with Tomago Aluminium over a potential rescue package, amid mounting pressure on state and federal Labor to prevent the collapse of a large Australian manufacturer.

The talks come amid growing concerns over the future of the Tomago smelter, located near Newcastle, which is the country’s biggest aluminium producer and a major industrial energy user. Its potential closure would deal a significant blow to Australia’s manufacturing sector and result in the loss of hundreds of direct jobs and thousands more across the supply chain.

Mr Minns stressed that the smelter was a strategically important asset for both NSW and the nation’s industrial future.

“It’s difficult for me to speculate about what the next steps are,” he said. “In order for us to have an effective intervention, we need to have commercial discussions with the owners and operators of [Tomago]. That’s what we’re doing.”

The NSW government’s confirmation of talks follows growing calls from industry and unions to secure Tomago’s future, particularly as governments ramp up their rhetoric about rebuilding domestic manufacturing and supporting the energy transition.

The smelter is jointly owned by Rio Tinto, CSR and Hydro, and produces about a quarter of Australia’s primary aluminium — a critical input for construction, transport, and increasingly for renewable energy infrastructure like solar panels and transmission lines.

Tomago has also long been a lightning rod in debates over energy policy, given its substantial electricity consumption — around 10 per cent of NSW’s total demand — and its vulnerability to market volatility.

Both the state and federal Labor governments have made public commitments to revive and support domestic manufacturing, especially in regional areas, but the prospect of a major industrial closure would test those promises.

While Mr Minns would not confirm the terms of any assistance being discussed, options could include direct energy price support, funding for technology upgrades, or longer-term transition assistance.

Industry sources say the smelter’s future hinges on securing more competitive and reliable electricity supply as it faces the broader challenge of decarbonisation.

Originally published as NSW confirms rescue talks for Tomago aluminium smelter