Rio Tinto secures power deal for Bell Bay aluminium smelter with $200m support package

Rio Tinto has secured a five-year operating arrangement for its Bell Bay aluminium smelter in northern Tasmania, backed by a government support package worth USD 200 million. The agreement includes a commitment to maintain a minimum level of employment at the 71-year-old facility until at least 2031, easing concerns over its future amid uncertainty about electricity costs.

Rio Tinto's aluminium chief executive Jérôme Pécresse confirmed the employment commitment but did not disclose the number of jobs covered. The guarantee is understood to cover around 500 positions. Bell Bay currently employs about 550 people and supports a further 1,200 jobs, with its future previously uncertain as the company sought a new power agreement.

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The arrangement follows negotiations between Rio Tinto, Hydro Tasmania and the state and federal governments. On October 1, Prime Minister Anthony Albanese and federal Energy Minister Tim Ayres announced the power agreement and government assistance. Rio Tinto has also committed to continued infrastructure investment at the site during the agreement period.

Pécresse said the smelter may not require the full government support if aluminium prices remain high. The assistance is linked to market prices and will reduce once aluminium prices cross a specified threshold, limiting the need for public funding when market conditions are stronger.

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The agreement follows a separate USD 2.5 billion support package approved in August for Rio Tinto's smelter in New South Wales. Pécresse stated that the company remained hopeful about Bell Bay's future beyond 2031, provided it could maintain competitive electricity prices. He also identified green manufacturing as an important part of the smelter's longer-term strategy as Australian industry looks to combine lower-emissions production with global competitiveness.