Tomago Aluminium has secured electricity supply through 2038 under an agreement with the Australian and New South Wales governments.
Power for Australia’s largest aluminium smelter will come entirely from renewable sources from 2033, Rio Tinto, Tomago Aluminium’s majority owner, said in a statement on Thursday.
Tomago Aluminium will enter a 10-year power purchase agreement after its existing electricity contract expires on 31 December 2028.
The company will invest A$1.1bn in real terms in the Tomago smelter through 2038, including A$100m for decarbonisation initiatives.
Rio Tinto said the shift to fully renewable electricity is expected to cut the smelter’s Scope 1 and 2 operating emissions by 7.1 million tonnes a year from 2033.
The smelter, located near Newcastle in New South Wales, produces up to 590,000 tons of aluminium annually – almost 40% of Australian annual aluminium production.
Tomago is also New South Wales’ largest electricity user. Under the arrangements, it will continue providing demand response services by reducing electricity consumption during periods of stress on the state’s power system.
The agreement follows a deal reached in March to secure the longer-term future of Rio Tinto’s Boyne aluminium smelter in Gladstone, Queensland, beyond its current electricity contract.
Tomago Aluminium is an independently managed joint venture owned by Rio Tinto, with a 51.55% stake, Gove Aluminium Finance, with 36.05%, and Norsk Hydro, with 12.4%.
