Rio Tinto Aluminum Smelter Gets $1.8 Billion Australian Bailout

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Or sign-in if you have an account.(Bloomberg) — The owners of Australia’s biggest aluminum smelter, including Rio Tinto Group, have secured a government bailout of A$2.5 billion ($1.8 billion) to keep the plant operating as it grapples with high energy costs.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountMajority owner Rio and its partners at the Tomago smelter in New South Wales secured financial support from both the federal and state governments, which will see the venture invest A$1.1 billion in the smelter, according to reports in the Sydney Morning Herald and Australian Financial Review. It will also make the plant more flexible, so that it can reduce power consumption at times of high demand on the grid. The bailout was first reported on Wednesday, without financial details. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againElectricity costs have strained aluminum smelters around the world, forcing some operators to shut facilities or reduce output, as competition intensified from lower-cost, subsidized plants in China. Rio has previously said electricity accounts for more than 40% of Tomago’s operating costs, and Prime Minister Anthony Albanese pledged financial support in December, after Rio warned that soaring costs could force the smelter to close when its existing power-supply contract expires later this decade.Rio owns slightly more than half of the Tomago plant, which has produced aluminum for more than 40 years. Gove Aluminium Finance Ltd. and Norsk Hydro ASA also hold stakes in the venture that operates the facility.As part of the arrangement, the smelter’s owners also committed to spending A$100 million in reduced-emissions processes. The Tomago package follows government support secured by Rio in March for its Boyne smelter in Queensland, where the company received A$2 billion in combined federal and state funding.Rio is not alone in receiving Australian government support for energy-intensive industrial assets. Last year, the federal and respective state governments provided support packages to Glencore Plc for its Mount Isa copper smelter and associated refinery, while Trafigura Group subsidiary Nyrstar Australia received funding for its Port Pirie lead smelter and Hobart zinc works.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.