New South Wales and federal governments will spend $2.5 billion of public money over the next decade to secure the future of Tomago Aluminium, Australia’s largest aluminium smelter. This massive public expenditure comes despite Rio Tinto, the smelter's owner, reporting a $10 billion profit after tax in 2025, attributable to its owners. The two governments are expected to split the bill, with NSW contributing $1.225 billion over 10 years from 2029.
Late last year, Rio Tinto threatened to close the Tomago Aluminium plant, claiming it would be forced to shut down when its energy supply contract expired in 2028. The corporation cited rising costs for both renewable and coal-fired power as its reason. The smelter, operational 24 hours a day since 1983, consumes about 10 per cent of NSW’s total electricity supply annually, making it the state's largest single electricity user.
Who Profits from Public Funds?
A joint statement from the NSW and federal governments declared the funding package would "secure the future of aluminium smelting in the region." They framed the joint investment as delivering "a long-term renewable energy solution" that "supports commercially sustainable operations beyond 2028" and "accelerates decarbonisation." This narrative obscures the direct transfer of public wealth to a highly profitable private entity. Rio Tinto will invest a minimum of $1.1 billion on top of the taxpayer funding, a figure less than half the public contribution and a fraction of its annual profit. This corporate "investment" includes $100 million for further decarbonisation activities and an innovative demand-response program, which a spokesperson said aims to position Tomago as an international leader in electricity demand response and flexibility services.
Prime Minister Anthony Albanese and NSW Premier Chris Minns are scheduled to visit the smelter on Thursday to promote the deal. During earlier negotiations, the federal government pushed for an even 50:50 funding split, similar to a deal made with Queensland for the Boyne Aluminium Smelter. Premier Minns initially resisted this proposal, stating any state contribution must serve the "interests of NSW taxpayers," a sentiment now seemingly abandoned in favor of corporate subsidy.
Workers Held Hostage
The smelter employs approximately 1,000 workers. These workers have been living under the shadow of corporate threats for months. Electrical Trades Union organiser Brad McDougall described the situation as "very difficult for all employees on the site." He reported workers saying, "I wake up every day not knowing if today is going to be the day, positive or negative." The union stated workers had been "on edge" awaiting an announcement about their future, highlighting the precarity imposed by corporate decisions.
This rescue package is not an isolated incident. It follows a pattern of similar bailouts extended by the Albanese government to other heavy industries. Glencore's Mount Isa Copper smelter and the Nyrstar smelters in Tasmania and South Australia have all received public funds. These actions consistently demonstrate the state's function in protecting accumulated wealth and ensuring the continued operation of private capital, even when those entities are immensely profitable. Rio Tinto's total aluminium and lithium projects were valued at $4.6 billion, up from $3.6 billion in 2024, further underscoring the company's robust financial position even as it extracted public funds.