Australia powers up: PM announces $2 billion boost to green aluminium revolution

On Monday, January 20, 2025, Australia’s prime minister Anthony Albanese declared an AU$ 2 billion (US$1.24 billion) investment strategy to foster the Australian aluminium production journey towards a greener future. Aluminium smelters transitioning to renewable power, with every tonne of the metal produced using renewable electricity over a 10-year period to 2036, is deemed to fall under the payment scheme of the funding.

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Albanes has shared that investing in the local aluminium industry is a ‘massive opportunity’ to create jobs and set Australia up for the future, adding, “We’ve got the resources, the workers, and the know-how -- the only thing we don’t have is time to waste.” The prime minister optimistically conveyed, “We are building Australia’s future, not taking Australia backwards.”

As the new scheme was uncovered at the smelter site of Tomago Aluminium, the country’s largest producer of the metal and the country’s largest electricity consumer, mother concern Rio Tinto supports the government’s announcement of an aluminium production credit. They have embraced the initiative designed to sustain and expand aluminium smelting in Australia, significantly benefiting regional communities and enhancing the nation’s manufacturing capabilities.

Kellie Parker, Chief Executive of Rio Tinto Australia, demonstrated on this note, “The Australian Government’s commitment shows strong confidence in domestic manufacturing and the nation’s position in the global economy. As traditional energy sources for heavy industry become increasingly uncompetitive, today’s announcement is a critical piece in helping future-proof the industry. Such support is crucial for sustaining and growing regional economies. As global industrial customers and consumers increasingly focus on low-carbon products, this support signals Australia’s potential to be a major supplier of the aluminium needed for the global energy transition, creating a foundation for local businesses and manufacturing to thrive.”

In 2021, Tomago announced its aim to transition to nearly 100 per cent renewable energy by 2029. Jerome Dozol, the chief executive of Tomago Aluminium since July, was earlier sceptical and contradicted the prospect of attaining the smelter’s plan to switch to a primarily clean power supply henceforward this decade, noting that the cost of the energy on offer was humungous for the Tomago smelter near Newcastle (Australia) to continue operations without government aid. Ddozol asked for ‘urgent action’ to ensure uninterrupted operations at the specified plant. The existing electricity supply contract to the smelting facility, which employs more than 1000 people, is with AGL Energy and expires at the end of 2028.

Rio Tinto’s integrated aluminium production chain in Queensland is a prominent economic driver for Australia, employing over 4,500 workers directly and supporting thousands more livelihoods across the country. The company’s site in Gladstone alone accounts for more than 3,000 jobs, with 1,000 of those positions at Boyne Smelters Limited (BSL). Additionally, Rio Tinto’s bauxite operations in Weipa provide employment for over 1,300 people, supplying raw materials to the manufacturing facilities in Gladstone.

Rio Tinto has also welcomed the recent announcement regarding its 51.55 per cent ownership of Tomago Aluminium Company and looks forward to collaborating with the New South Wales Government to secure the future of that operation. According to Tomago, the company accounts for 10 per cent of all electricity consumption in New South Wales, Australia’s most populous state. Electricity costs constitute about 40 per cent of the company’s total expenses.

The Australian Prime Minister has made renewable energy a key focus ahead of the 2025 general election, which is scheduled to take place in May. His Labor Party government has set a target of achieving 82 per cent of Australia’s electricity from renewable sources by 2030.