Rio Tinto Seeks Multibillion-Dollar Bailout for Tomago Smelter in Australia

Rio Tinto is actively negotiating with Australian federal and state governments to secure a multibillion-dollar bailout for its Tomago aluminium smelter in New South Wales, primarily to address the facility's rising energy costs. The talks focus on establishing electricity contracts for 2026 to 2029 and obtaining federal production tax credits, as part of a broader government initiative to help aluminium smelters transition to renewable energy by 2036. The Tomago smelter, which consumes about 10% of New South Wales' power and produces 590,000 tonnes of aluminium annually, is majority-owned by Rio Tinto alongside CSR and Hydro Aluminium. The Australian government has pledged A$2 billion in production credits to support this transition, reflecting efforts to sustain the aluminium sector amid energy price fluctuations and environmental sustainability challenges. Analysts view Rio Tinto's stock positively despite the smelter's challenges, with projections indicating potential share price appreciation. However, official comments from Rio Tinto and government officials have not been forthcoming.