Australian authorities said on Thursday they would provide AU$2.5 billion ($1.76 billion) to help keep the Tomago aluminum smelter of the global giant Rio Tinto running beyond 2028 as it transitions to renewable generation.
The deal would support 3 gigawatts (GW) of new generation for the smelter, with the financial package to be jointly funded by the federal and New South Wales state governments, a government statement said.
The deal includes a new power purchase agreement intended to provide "reliable, internationally competitive" electricity, 100% renewable from 2033, which Rio Tinto said will cut the plant's direct and indirect carbon emissions by a quarter.
Rio Tinto warned in October that Tomago could be forced to close if it failed to secure commercially viable power beyond 2028.
Tomago will invest at least AU$1.1 billion in the facility as part of the deal, including AU$100 million to drive further decarbonisation activities at the smelter.
