Letter to the Editor: False assertions on Tomago

DEAR News Of The Area,

I REFER to the recent letter from Charles Hemming, in which he links the increasing amount of renewable energy in the grid to what he terms as the likely demise of the Tomago Aluminium Smelter.

This assertion is not true.

All of the smelter’s electrical power is currently supplied by AGL Energy through a fixed price supply contract which was signed in 2018 and runs through December 2028.

This means that the smelter is totally independent of power price variations experienced by other industrial and domestic customers.

It is widely assumed that the smelter’s power supply contract is heavily subsidised by government, reflecting the perceived importance of the industry to the nation at the time the contract terms were negotiated.

Tomago Aluminium is NSW’s largest user of electricity. It is majority owned by Rio Tinto which also has operational control over two other aluminium smelters in Australia.

The terms of any electricity supply contract beyond 2028 are obviously of crucial importance to the future economics of the Tomago operation, and negotiations about future supply have clearly been underway between Rio, energy suppliers and State and Federal Governments for some time.

The Federal Government and Rio Tinto both recognise that the future for aluminium smelting in Australia depends on securing commercially viable, low-carbon energy supply contracts.

Indeed, the future of Rio Tinto’s Boyne Smelter has recently been secured through a major renewable energy Power Purchase Agreement backed by the Queensland Government.

Rio Tinto is a publicly listed company which during 2024 reported an after-tax profit of US$11.6 billion, of which their aluminium division contributed approximately 15 percent.

NSW’s coal-fired power stations and high voltage transmission network were sold to private sector companies by the NSW Government ten years ago.

Regards,
Gordon SUTCLIFFE,
Hawks Nest.