Rio Tinto In Bailout Talks For Aussie Smelter

Global miner Rio Tinto is in talks with the Australian federal and state governments about a multibillion-dollar bailout for its struggling Tomago aluminum smelter in New South Wales, the Australian Financial Review (AFR) reported.

Rio Tinto said it would determine the smelter's fate by mid-year. I Tomago Aluminum

Citing unnamed sources, the AFR reported that discussions are focused on the smelter's electricity contract for 2026 to 2029 and potential federal production tax credits.

The future of the facility—majority-owned by Rio—has been uncertain for months, largely due to soaring energy costs, as Sam McKeith also reported for Reuters.

In February, Rio, the world’s largest iron ore producer, said it would determine the smelter's fate by mid-year.

Located about 125 km (80 miles) north of Sydney, the Tomago facility consumes around 10% of New South Wales' power supply to produce 590,000 tons of aluminum annually. It is jointly owned by Rio, CSR, and Hydro Aluminum.

In January, Australia's center-left government pledged A$2 billion in production credits to help support the country's four aluminum smelters—including Tomago—as they transition to renewable energy before 2036.

The country has set ambitious climate goals and is pushing aggressively to develop renewable power sources.