Albanese flags long-term power talks for Tomago as 2028 electricity deadline looms

12 December 2025

newy.com.au – Prime Minister Anthony Albanese visited the Tomago aluminium smelter in the Hunter on Friday to announce that work is under way on a long term electricity arrangement aimed at keeping the plant operating beyond 2028.

The smelter’s current power contract expires in December 2028. Its future has become a critical industrial issue for the region, given that aluminium production requires massive volumes of continuous, reliable electricity.

Speaking at Tomago, Albanese said the Commonwealth had been working with Tomago Aluminium and Rio Tinto and had been in contact overnight with Simon Trott, Chief Executive of Rio Tinto Iron Ore. Albanese also stated that Ministers Tim Ayres and Chris Bowen had been progressing a plan to provide “security going forward beyond 2028, particularly using clean energy.”

Albanese said the Government had been working “constructively” with the NSW Government and he had spoken with Premier Chris Minns the day before, with further work to continue “over the coming weeks” to finalise arrangements. He described the smelter as being in the national interest and said Australia needed to “continue to make things here”.

A journalist asked whether the deal involved Snowy Hydro, and Albanese replied that details would be worked through, but the “fundamentals” were Tomago agreeing to more investment in capability while Government provided “security of a guarantee of energy price going forward”. He said a board meeting had considered proposals that were being developed.

Assistant Minister for a Future Made in Australia Tim Ayres said the announcement was “a really important staging post” and all parties had agreed to work towards a final agreement “over the coming weeks and months”. He said the objective was “a long-term power purchasing agreement” that delivered “security at the right price for Tomago so they are internationally competitive”.

Ayres said the arrangement would underwrite new electricity supply, including “new generation wind-solar storage projects and transmission”, and would “accelerate that in New South Wales”. He said the work would also help “building the electricity grid and lowering costs for households and business at the same time”.

Labor MP Meryl Swanson said ‘thunder struck this morning’ during the morning storms and described it as ‘a really positive sign’ for the facility, the region and the nation. She told workers who had gathered outside “in the rain” [before the press conference was moved inside] they could go home for Christmas and say, “we are going to make this work, this Government is standing with us”.

Tomago Aluminium has previously argued the post 2028 power task is about more than the size of the bill, because aluminium smelting requires uninterrupted electricity to keep potlines operating continuously. In a submission to the Australian Competition and Consumer Commission, the company said interruptions can trigger potline freezing in a “very short space of time”, and an uncontrolled freeze can require a costly rebuild, with repairs for a complete potline costing more than $100 million and taking up to a year.

The company has also said its scale makes replacement supply difficult to contract, describing the smelter as taking about 950 megawatts as a flat load and consuming around 10–12% of NSW electricity demand, or about 8.3–8.5 terawatt hours a year. Tomago has said electricity accounts for more than 40% of its operating costs and that proposals it has received for supply from January 2029 would fundamentally change the economics of the site.

Albanese was asked whether Government support for large manufacturers was fair to taxpayers, and he said “what’s not fair to the taxpayer and our national interest, is to not have manufacturing in this country”. He described the intervention as “an investment that produces a return”, pointing to the “multiplier effect” of heavy industry and the role of aluminium in other parts of the economy.