Tomago Aluminium prepares backup plans to keep the country’s aluminium smelter operational

Due to persistent shortages, Tomago Aluminium is compelled to prepare numerous backup plans for the supply of crucial materials to keep the country's largest aluminium smelter operational. CEO Matt Howell anticipates the shortages to last for a long time.

“Anything that comes by a container is being delayed,” said Mr Howell about the supply chain issues that are delaying supplies of boots, apparel, chemicals, and other specialty raw materials and components to the NSW factory

 “We’ve got an amazing procurement team that has really looked forward for months, to like, if this particular supply line no longer works, where do we get it? What’s our plan A, what’s our plan B, what’s our plan C? So we haven’t run out of anything. That’s purely as a result of the fantastic work that our procurement team is doing to be proactive rather than reactive,” added Mr Howell.

The supply chain issues come on top of the severe interruptions that had already occurred among the workers at the factory north of Newcastle as a result of infections caused by the omicron strain of COVID-19 and the need for worker isolation. These challenges have been far more difficult for the plant this summer than the company's more common problem of high power costs and demand, which can sometimes force a brief controlled closure of a potline.

Because of the absences, Tomago has had to bring back some employees from vacation early and rehire several recently retired personnel. He said the effort is necessary to avoid any potline shutdowns at the smelter, which would be "catastrophic" for the business and jobs.

“We’ve got dozens of new staffers as a precautionary effort to guard against people not being available, and we’re running rapid antigen tests morning and night,” stated Mr Howell said, expressing appreciation to NSW Health and the nurses who worked on-site to test all those who had been exposed to the virus, were at risk, or had symptoms.

Many local cases, he added, could be linked directly to the Newcastle nightclub that launched the omicron outbreak in the region last month, through the children of staff who tested positive and infected family members.

“It is disruptive ... we’re really tight for labour,” highlighted Mr Howell, assessing that at the facility, where 350-400 workers work weekday shifts, between 20 and 50 people are regularly off for one reason or another during any given week.

 “We’re managing to keep the place running, but it’s only on the back of the continuous screening program, so this occurs every morning for four hours, every afternoon for four hours. It’s pretty expensive,” said Mr Howell.

He did, however, say that the corporation was pleased to pay for quick antigen testing and that he and the nurses did not support requests for RATs to be made available to businesses for free.

“Compared to the annual cost of our safety program it’s a rounding error, so we don’t begrudge the fact that we’ve got to buy those tests, and we’d rather have them administered by a nurse than have employees do it themselves because it is possible to, quite frankly, to get it wrong if you don’t sample properly,” added Mr Howell.

Mr Howell is hopeful that the local omicron infections have passed their peak, citing a decrease in positive tests as a result of the screening efforts.

However, given the worrying statistics coming out of Europe, he believes the supply chain issues will persist for some time. The World Health Organization warned last week that more than half of Europeans might be infected with the omicron strain in the next six to eight weeks, citing "a fresh west-to-east tidal wave sweeping through the area."

“What’s happening in Europe, particularly the reported omicron infections, that just appears to be escalating on a daily basis, and we know that will have impacts on manufacturers that we depend on,” said Howell.

“We know and understand this is going to go on for some period of time. We just have to again be thinking out months in advance and have contingency plans available should critical supply lines just dry up,” added Mr Howell.