The Albanese and Rockliff governments have announced a five-year support package for Rio Tinto’s Bell Bay Aluminium smelter, securing about 500 direct jobs and a further 1000 indirect jobs across northern Tasmania.
Prime Minister Anthony Albanese, Tasmanian Premier Jeremy Rockliff and Industry Minister Tim Ayres announced the deal at the smelter on Thursday, ending 18 months of uncertainty for the workforce. Rio Tinto says the arrangement provides a pathway through to the end of 2031.
The package is a $200 million contribution split 50-50 between the Commonwealth and Tasmanian governments, paid to Rio Tinto over five years. Tasmanian Energy Minister Nick Duigan said it is capped at $50 million a year and tied to the London Metal Exchange price of aluminium. At a high price there is no subsidy, at a low price the support applies, and the contribution declines over time on a linear scale.
“We expect that the exposure is very small in the early years,” Albanese said, noting current aluminium prices are very high.
The support package is separate from a commercial power deal struck between Hydro Tasmania and Rio Tinto, which Duigan said was concluded at arm’s length from government. Ayres said the government funding fills the gap to deliver the most competitive electricity price for the facility. The new arrangements start on January 1, 2027, and Duigan said a three-year review will examine the smelter’s future.
Rockliff said the deal would deliver about $5 billion in economic benefit to northern Tasmania over five years, along with a billion dollars of investment from Rio Tinto into TasPorts, TasNetworks, Hydro and payroll tax. He said the government was prepared to invest between zero and $100 million to secure that outcome.
“This has been an uncertain time and I empathise and understand the anxiety that that uncertainty creates,” Rockliff said. “Today provides certainty.”
Federal Member for Bass Jess Teesdale said the 550 workers had put decisions about buying a house or starting a family on hold during the uncertainty.
Rio Tinto Bell Bay General Manager Richard Curtis said the smelter, the first in Australia and the Southern Hemisphere, had been part of Tasmania’s story for 71 years. He thanked the governments and Hydro Tasmania for their engagement.
Asked why Rio Tinto, which recorded a $10 billion profit this year, should receive taxpayer support, Ayres said the government was “unapologetically” for local manufacturing happening in Australia. He pointed to similar interventions to secure production in Central Queensland and at Tomago.
Pressed on why the deal was not the 10-year arrangement initially sought, Ayres said a five-year deal was “a long period of certainty” that takes the smelter well into the 2030s. Duigan said the government expected to see the smelter operating “for 5 years, 10 years and beyond.”
Duigan rejected suggestions the power deal would leave too little electricity for the Firmus AI data centre nearby, saying Tasmania has plenty of renewable energy.
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