Bell Bay Aluminium has reached an in-principle, 12-month power agreement, after it last month told staff the company’s future in northern Tasmania was at “significant risk”.
Rio Tinto-owned Bell Bay Aluminium had been in discussions with Hydro Tasmania for a new power deal, with its 10-year agreement expiring on December 31.
The plant near George Town employs more than 500 people, and staff were given “unsettling” news last month that despite extensive negotiations with Hydro Tasmania, a new power agreement had not been reached.
The Tasmanian government has now announced it has “paved the way to secure the immediate future of Bell Bay Aluminium” with the in-principle, one-year agreement which allows time for the company, state and federal governments to figure out a long-term plan.
Premier Jeremy Rockliff said it was important that all governments continued to work together with Rio Tinto. (ABC News: Emily JB Smith)
“We are doing all we can to make sure the business continues to have a strong future in the state,” Premier Jeremy Rockliff said.
“We are committed to supporting the workforce and the wider community.
“It is important all governments continue to work together with Rio Tinto to secure the future of Bell Bay Aluminium, one of Australia’s greenest smelters.”
Power deal to ‘buy time’
The Tasmanian Minerals, Manufacturing and Energy Council (TMEC) said it was relieved to hear a short-term agreement had been reached.
“TMEC applauds the state government, Hydro Tasmania, and Bell Bay Aluminium for working together to buy time and keep the lights on — literally,” CEO Ray Mostogl said.
But TMEC said “this isn’t just a recent drama”.
“The stand-off over electricity prices has been brewing for years, and it’s finally come to a head,” it said.
“While TMEC isn’t involved in the private negotiations, it’s clear that rising wholesale electricity costs have made it harder for both sides to find common ground.”
Smelter pumps hundreds of millions into state’s economy
Tasmanian Energy and Renewables Minister Nick Duigan said the smelter injected $700 million a year into the state’s economy.
Nick Duigan said federal government support was necessary to provide the smelter with a sustainable operating trajectory. (ABC News: Mackenzie Heard)
“Hydro Tasmania has been engaged in good faith negotiations with Bell Bay Aluminium, and I expect a competitive, commercial energy price consistent with its charter obligations to put Tasmanian jobs and the economy first,” he said.
“As we have seen across the country, federal government support is necessary to provide the smelter with a sustainable operating trajectory, when coupled with a new long-term energy arrangement with Hydro Tasmania.
“It would be a perverse outcome for the federal funding arrangements to exclude the nation’s principal green aluminium smelter.”
Last month, a spokesperson for Federal Minister for Industry Tim Ayres said it was up to the Tasmanian government to help Hydro and Bell Bay Aluminium reach a deal, calling it a “failure”.
“This is concerning for the Bell Bay Aluminium workers, who would be affected by the potential decision to put the facility into care and administration by the end of this calendar year, as a result of the failure of the Tasmanian government to reach an agreement,” the spokesperson said.