The future of the Bell Bay Aluminium smelter in northern Tasmania has been secured with a $200 million joint support package from the federal and Tasmanian governments, announced on Thursday, October 1, 2026. The funding, spread over five years, is designed to protect 550 direct jobs and an estimated 1,000 to 1,200 indirect jobs across the region.
Under the terms of the agreement, which commences on January 1, 2027, and runs until the end of 2031, payments to Rio Tinto, the smelter’s owner, will be made on a sliding scale. Tasmanian Energy Minister Nick Duigan confirmed that no support would be paid when London Metal Exchange (LME) aluminium prices are high, with payments rising as prices fall. The annual support is capped at $50 million, with the federal and state governments splitting the cost equally.
Prime Minister Anthony Albanese noted that with current aluminium prices “very good, very high,” the financial exposure for taxpayers is expected to be small in the early years of the deal. Federal Industry Minister Tim Ayres stated the funding aims to “fill that gap” between Hydro Tasmania’s electricity price and what the company required, bolstering Australia’s industrial capacity.
The support package comes alongside a new five-year electricity supply deal struck between Hydro Tasmania and Rio Tinto. Negotiations for the smelter’s future had reportedly stalled for months over a previously cited $60 million annual difference between Rio Tinto’s position and Hydro Tasmania’s commercial power offer. Minister Duigan emphasised that Hydro Tasmania’s power deal was struck on commercial terms, “at arm’s length from government,” and delivered a “globally competitive and lowest possible electricity price” for the smelter.
Tasmanian Premier Jeremy Rockliff hailed the agreement as a “good deal for Tasmania” and a “great deal” for the workforce, stating that a three-way partnership was essential to keep the smelter open and boost local employment. The Premier also indicated the package is expected to inject approximately $5 billion into the northern Tasmanian economy over the next five years.
The Bell Bay smelter, Australia’s oldest, began operations in 1955 and produces around 190,000 tonnes of aluminium annually. It is a significant energy consumer, utilising more than a quarter of Tasmania’s total electricity supply, and supports about 180 suppliers with an annual spend of approximately A$260 million. Rio Tinto Aluminium & Lithium Chief Executive Jérôme Pécresse expressed gratitude to the governments and Hydro Tasmania for securing the outcome, providing certainty for employees, suppliers, and the northern Tasmanian community.
Readers can find more details on this story at Pulse Tasmania.