【Ferro-alloys.com】: It’s understood the fate of Tomago Aluminium could be settled as early as this week as negotiations are underway with the Federal Government to save the 40-year-old smelter from closure.

Owned by Rio Tinto, the facility in New South Wales produces more than a third of Australia’s aluminium but has been at risk of shutting down due to rising energy costs and no commercially viable energy supply partnership available to move forward.

The current energy agreement expires in 2028, with Rio Tinto said to be continuing to “engage with stakeholders on a viable pathway for Tomago” but there is still “significant uncertainty about when renewable projects will be available at the scale we need.”

While a decision has not yet been made about the future of Tomago Aluminium, the government is understood to be planning to underwrite the site by investing billions of dollars into the taxpayer-owned Snowy Hydro energy company to provide cheap energy to the smelter.

As reported in The Australian Financial Review (AFR), the plan is being developed by government officials and is yet to be signed off by Cabinet and will be undertaken in two components.

The first is for Snowy Hydro to provide electricity to Tomago under contract from 2028 to help bridge the gap until renewable energy projects come online, with the second part focusing on Snowy Hydro directly investing in renewable projects that will support the smelter long term.

The AFR reported multiple people familiar with the government’s plans for Tomago Aluminium said sources close to the matter were “increasingly optimistic” a deal could be struck to ensure the smelter remains open.

• [Editor:Alakay]