Rio Tinto, governments negotiate over $300M bailout for Tomago

• The Federal and New South Wales governments are negotiating a funding agreement to keep the Rio Tinto-controlled Tomago aluminium smelter open beyond 2028 using taxpayer-subsidised power.
• The potential rescue package could cost taxpayers more than $300 million a year over a decade, with discussions focusing on how costs are split between governments.
• The company stated that the intervention is designed to protect about 1,000 jobs and secure sovereign manufacturing capabilities in the Hunter Valley.

Prime Minister Anthony Albanese and NSW Premier Chris Minns have intervened directly to finalise a multi-million-dollar funding agreement to keep the Rio Tinto (ASX:RIO) Tomago aluminium smelter operating past 2028.

The development follows months of tense negotiations between state and federal officials over how to divide the financial burden of subsidising the facility's power supply.

The proposed rescue package could cost taxpayers more than $300 million annually over the next 10 years through taxpayer-subsidised power purchase agreements with Snowy Hydro.

Following the announcement, the Rio Tinto share price was unchanged at $168.41.

The facility accounts for 12% of New South Wales electricity demand and supports approximately 1,000 local manufacturing jobs.

Federal and state leaders previously secured similar funding arrangements to support aluminium production operations in other jurisdictions, including Queensland.