On Thursday, the federal and New South Wales governments jointly announced a deal to bail out the Tomago aluminium smelter, at a cost of A$2.5 billion over ten years.

The smelter is Australia’s largest single user of electricity. Its majority owner, mining giant Rio Tinto, had been warning higher electricity costs may force it to close.

Since coming to power, the federal Labor government has stepped in to save a number of struggling industrial facilities around the country – to the collective tune of billions of dollars.

However, this new deal to future-proof the Tomago smelter is different to those previous bailouts. It’s the result of more than a year of negotiations, with a return to the taxpayer, the workforce, the shareholders and the planet.

Avoiding leaving a ‘smelter-sized hole’

Tomago is Australia’s largest aluminium smelter. It contributes $2.2 billion to the Australian economy each year, with exports of around $3 billion. The facility employs more than 1,000 full-time workers directly, and supports many more in local supply chains.

Tomago is not only crucial to the Hunter region’s manufacturing base. It is also an important part of the national energy transition. Aluminium is vital to the jobs and industries of the future.

As Industry and Innovation Minister Tim Ayres said in May:

The full benefits of new industrial firms and technologies are less likely to........

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