A report out today in the AFR suggests that “Australia’s biggest aluminium smelter, Tomago, has started a consultation process with employees on the plant’s potential closure”
Tue 28 Oct 2025 09.00
Photo: Tomago Aluminium in Tomago, NSW, Monday, January 20th, 2025. (AAP Image/Michael Gorton) NO ARCHIVING
The reason for the possible closure? Energy prices and especially that “its current electricity supply contract with AGL Energy expires at the end of 2028”.
Electricity is a massive cost of producing aluminium – it makes about 40% of the costs. It’s also part of the reason why aluminium smelting is a very big greenhouse gas emitting process.
But when it comes to the cost of electricity and all energy, the culprit is very much gas.
In Australia, as readers will no doubt know, we export about 80% of our gas. So, despite being roughly tied with the USA and Qatar as the biggest exporter of LNG we constantly have stories about a possible “gas shortage”. That in itself is bad enough, but since the opening of the Gladstone LNG terminal, the price of gas, and electricity, has been tied to the world price for gas. And the picture is clear – as Australia’s exports have gone up, so too has the cost of gas and electricity for manufacturers.
If we were to tax Australia’s gas exports – say at 25% – and also had a reservation policy, that would not only deliver greater revenue to the government it would provide Australia’s manufacturing industry (and households) with lower cost energy.
But instead, we are told we can’t restrict gas exports and that we need to get more gas (for export).
Serious piss taking by the gas industry, and unfortunately the Government is letting them do it.
Markets are predicting two interest rate rises in 2026 but the Australia Institute’s chief economist has urged cash-strapped mortgage holders not to panic just yet.
The release of the mid-year fiscal and economic outlook (MYEFO) has revealed the cost of the changes to the superannuation tax concessions made by the government and the continued failure of the Petroleum Resources Rent Tax (PRRT) to deliver fair benefits to Australians
A new report on the amount of revenue expected to be raised by the changes to superannuation tax on balances over $3m highlights yet again how the tax system is weighted in favour of the rich and that the government never gets thanks for doing what conservative forces demand.
