A multinational resources company has warned soaring power costs might force it to close multiple metal refineries, causing thousands of job losses.
Rio Tinto is holding talks with state governments and electricity retailers to try to secure subsidies, so it can keep operating its aluminium smelters across the East Coast and across the Tasman Sea.
The company’s Pacific Aluminium subsidiary recently posted a full year loss of $137 million across its Queensland, New South Wales, Tasmania and New Zealand operations.
It blamed rising electricity prices for affecting its bottom line, especially in NSW where 12 per cent of the Premier State’s entire electricity is used at the Tomago Aluminium Smelter, 24km northwest of Newcastle.
2500 jobs at risk
Rio claims it cannot continue to employ more than 2500 workers if it keeps losing money at Pacific Aluminium. The company recently announced it would invest $1 billion into renewable energy power generation for its aluminium, copper and high-grade iron ore operations.
“Seventy-six per cent of electricity consumption at managed operations is from renewable energy and most of the operations have significantly lower carbon intensities than sector averages,” the company said in a public statement.
However, it may be too late for any potential savings to help avoid any smelter closures as one electricity provider revealed the mining giant has already started reviewing its New Zealand operations.
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Different sides of politics fear more operations could face similar reviews unless the government steps in.
“If we do not take this as a serious warning, we will lose all of our huge businesses, industries, manufacturing, jobs will go,” One Nation Senator Pauline Hanson told the Nine Network.
Nationals MP Barnaby Joyce speculates some of the smelter work might be moved overseas.
“We are not only losing our competitive advantage, we are moving jobs overseas because they are still going to process bauxite just not in Australia and not with Australian workers,” he told the broadcaster.