Smelter future secured after $200m rescue package, saving hundreds of jobs

One of Tasmania’s biggest employers has been handed a $200 million lifeline, securing hundreds of jobs until 2031.

The federal and Tasmanian governments have struck a deal with Rio Tinto to keep its Bell Bay aluminium smelter running for another five years.

It ends a year of uncertainty for workers and local businesses.

In northern Tasmania, Bell Bay directly supports about 550 full-time staff, while Rio Tinto says another 1200 jobs are indirectly tied to the smelter.

Its future had been in doubt as its existing electricity agreement with Hydro Tasmania was due to expire on December 31 this year.

Under the new arrangements, Hydro Tasmania will continue supplying electricity until the end of 2031, while the state and federal governments provide additional financial support to keep the smelter internationally competitive.

Tasmanian Premier Jeremy Rockliff said the agreement would provide certainty after an anxious period for workers and businesses across the region.

“The outcome we have today is the security of over 500 jobs at Bell Bay Aluminium,” he said.

Rockliff said the smelter was expected to pump about $5 billion to Tasmania’s economy over the next five years, with Rio Tinto also providing about $1 billion through payments to TasPorts, TasNetworks, Hydro Tasmania and payroll tax.

“If someone came to me and said, ‘Can we invest zero to $100 million over the next five years to secure a $5 billion economic value?’ I’d say, you beauty,” he said.

Bell Bay spends about $260 million annually across 180 suppliers.

The smelter has operated since 1955 and was the first of its kind in the Southern Hemisphere.

It produces about 190,000 tonnes of aluminium each year, with most of that metal exported for use across industries including transport, construction, packaging and electrical manufacturing.

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Prime Minister Anthony Albanese said keeping major industrial operations running in Australia was important as the country sought to reduce its reliance on imports.

“I want to lead a country that makes things here,” he said.

“We need to ensure that in today’s uncertain world, we be less dependent upon imports and that we’re able to ensure that we manufacture things for domestic purposes, but also that we manufacture for export as well.”