Rio Tinto he endorsed the agreement that will allow Tomago Aluminium to secure a competitive electricity supply until 2038 and operate with 100% renewable energy from 2033.
Australia’s largest aluminum smelter has a new energy roadmap, the agreement reached between Tomago Aluminium, the Australian Government and the New South Wales Government will guarantee the plant’s electricity supply until 2038.
The agreement aims to stabilize a key facility for Australian industry and the Hunter region, it will also enable the company to move towards lower-carbon aluminum production while maintaining its supply capacity to international customers.
Rio Tinto secures a PPA for Tomago Aluminium until 2038
Specifically, Tomago Aluminium will sign a 10-year power purchase agreement (PPA) to supply the smelter until 2038. The new contract will begin after the current power supply expires on December 31, 2028.
From 2033 onwards, all electricity supplied under the PPA will come from renewable sources in this way, the foundry will have a defined path to reduce the impact of one of the main energy components associated with aluminum production.
The scale of the operation explains the importance of the agreement, The company is the largest electricity consumer in New South Wales and its operation requires a continuous supply capable of maintaining the plant’s competitiveness.
The foundry will receive an investment of A$1.1 billion
Furthermore, Tomago Aluminium will support the energy agreement with an investment of 1.1 billion Australian dollars in real terms from now until 2038.
Of that amount, $100 million will be allocated to decarbonization initiatives the remaining capital will allow the company to sustain operations and support the future of a foundry that produces up to 590,000 tons of aluminum per year.
This capacity is equivalent to about 40% of Australia’s annual aluminum production. The plant also directly employs around 1,000 people and works with about 200 full-time equivalent contractors.
Renewable energy will reduce Tomago Aluminium’s emissions
Furthermore, the shift in the electricity mix will have a considerable effect on the facility’s emissions. When the supply reaches 100% renewable sources in 2033, Tomago Aluminium’s Scope 1 and 2 operational emissions will be reduced by 7.1 million tons of carbon per year.
The foundry will continue to offer responsiveness to demand within the electrical system from New South Wales. This allows for a temporary reduction in consumption during periods of pressure on the network and helps to improve the reliability of the system.
This flexibility can also facilitate the integration of larger volumes of renewable generation into the electricity grid as Australia progressively transforms its energy mix.
Rio Tinto strengthens its Australian aluminum supply chain
The Tomago agreement complements the one reached in March 2026 to secure the future of the Boyne aluminum smelter in Gladstone, Queensland. With both commitments, Australia’s two largest aluminum smelters have a path to low-carbon, competitive energy beyond their current power contracts.
For Rio Tinto, this also strengthens its integrated aluminum supply chain in eastern Australia, which includes bauxite operations, alumina refineries and smelters.
The company operates jointly but is managed independently, Rio Tinto owns 51.55%, Gove Aluminium Finance Ltd controls 36.05%, and Norsk Hydro holds the remaining 12.4%.
With the new PPA, the planned investment and the transition to renewable electricity, the smelter will have energy coverage until 2038 while maintaining a relevant position within Australian aluminum production.
Source: Rio Tinto
Photo: Shutterstock
