Rio Tinto aluminium and lithium chief executive Jérôme Pécresse has assured workers at the Bell Bay Aluminium smelter in northern Tasmania that the company will maintain a minimum level of employment and investment at the site until at least 2031, under a new power deal and taxpayer-funded support package that is contingent on aluminium prices.
The 71-year-old smelter, which employs 550 people directly and supports about 1,200 jobs, faced fears of closure earlier this year if an agreement was not reached. After months of negotiations, governments became involved, and on October 1 announced a new power deal had been reached alongside up to $200 million in taxpayer support. The region recently lost the Liberty Bell Bay manganese alloy smelter in July, resulting in about 200 job losses.
Pécresse visited the Bell Bay site on Tuesday but did not disclose the exact number of guaranteed jobs, though the ABC understands it is about 500, varying across years. "I wanted to be with the team and discuss on that basis how we are now going to run the smelter together for at least the next five years," he said. He confirmed Rio Tinto had committed to maintain a minimum level of employment and continue asset investment through until 2031.
The $200 million support package may not be fully used if aluminium prices remain high. “Above a certain level of price of aluminium, the level of [funding] support disappears,” Pécresse said. “For example, at today's aluminium pricing, I don't think the level of support would be granted to Rio Tinto.”
Federal Energy Minister Tim Ayres said the package contains “sensible safeguards” and requires Bell Bay Aluminium to continue delivering “green aluminium, jobs and investment in the region”. In August, speaking about the joint support package for Rio Tinto's Tomago smelter, he told the ABC that if aluminium prices were at a sustained high level, there would be a return to the taxpayer.
A Tasmanian government spokesperson said assistance is linked to aluminium prices, and if prices are sufficiently high, taxpayer support will not be required. "It would not have been reasonable for Tasmanian taxpayers to have covered the cost alone," the spokesperson said. Hydro Tasmania said it does not seek the highest possible price when negotiating with major industrial customers, balancing commercial operations with the lowest possible power prices.
Pécresse said the smelter was a competitive asset and he hoped it would be there for "many more decades".
Analysis
Why This Matters
- The Bell Bay smelter is a major employer in northern Tasmania, and its closure would have devastated a region already reeling from the Liberty Bell Bay loss.
- The taxpayer support package is structured as a safety net that only activates when aluminium prices are low, potentially costing public funds during industry downturns.
- The deal follows a similar $2.5 billion support package for Rio Tinto's Tomago smelter in NSW, setting a pattern for government intervention in energy-intensive industries.
Background
The Bell Bay Aluminium smelter was established in the 1950s as a joint venture between the state and federal governments. Earlier in 2026, Rio Tinto and Hydro Tasmania engaged in protracted negotiations for a new power deal, with the gap between the offered price and the asking price reported at about $60 million per year. The federal and state governments became involved, and on October 1, Prime Minister Anthony Albanese announced a new power deal and a support package of up to $200 million. In August, the federal and NSW governments struck a $2.5 billion support package for Rio Tinto's Tomago smelter in the Hunter Valley.
Key Perspectives
Rio Tinto (CEO Jérôme Pécresse): says the company committed to a minimum level of employment and asset investment at Bell Bay until at least 2031, in return for the taxpayer-funded support package. The level of government support depends on aluminium prices; at current prices, it would not be triggered.
Tasmanian government: says assistance is linked to aluminium prices, and if prices are sufficiently high, taxpayer support will not be required. It argues global competitiveness is a national challenge and it was important to partner with the federal government.
Hydro Tasmania: says it seeks to negotiate commercial electricity agreements that have value for the customer and Tasmania, and does not seek the highest possible price when negotiating with major industrial customers. It balances commercial operations with keeping power prices as low as possible.
What to Watch
- The exact number of guaranteed jobs, which Rio Tinto has not disclosed but the ABC understands to be about 500.
- Aluminium prices: if they remain high, the $200 million support package may not be drawn, but a downturn could trigger significant public expenditure.
- The smelter's future beyond 2031, when the current power deal expires, and whether Rio Tinto will seek further support.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedRio Tinto committed to maintain a minimum level of employment at Bell Bay until 2031.Latest business news: “He confirmed the company had committed to maintain a minimum level of employment and continue asset investment through until 2031.”
- SupportedThe support package is linked to aluminium prices and may not be needed if prices are sufficiently high.Latest business news: “As outlined when the support was announced, assistance is linked to aluminium prices. If prices are sufficiently high, taxpayer support will not be required”
- SupportedPécresse said that at current aluminium prices, support might not be granted to Rio Tinto.Latest business news: ““For example, at today's aluminium pricing, I don't think the level of support would be granted to Rio Tinto.””
- SupportedThe smelter is 71 years old, employs 550 people and supports a further 1,200 jobs.Latest business news: “There were fears the 71-year-old smelter, which employs 550 and supports a further 1,200 jobs, would close if an agreement was not reached.”
- SupportedThe smelter faced fears of closure earlier in the year if an agreement was not reached.Latest business news: “There were fears the 71-year-old smelter, which employs 550 and supports a further 1,200 jobs, would close if an agreement was not reached.”
- SupportedOn October 1, a new power deal was announced alongside taxpayer support of up to $200 million.Latest business news: “But on October 1, three months before the current deal was due to expire, Prime Minister Anthony Albanese and federal Energy Minister Tim Ayres stood alongside state counterparts and announced a new power deal had been reached, alongside a support package of up to $200m .”
- SupportedThe Liberty Bell Bay manganese alloy smelter closed in July, resulting in about 200 job losses.Latest business news: “The region recently lost a major employer with the closure of the Liberty Bell Bay manganese alloy smelter in July , resulting in about 200 job losses.”
- SupportedPécresse said, “I wanted to be with the team and discuss on that basis how we are now going to run the smelter together for at least the next five years.”Latest business news: “"I wanted to be with the team and discuss on that basis how we are now going to run the smelter together for at least the next five years."”
- SupportedThe ABC understands the guaranteed job figure is about 500 and varies across years.Latest business news: “The ABC understands the figure varies across years, but is around 500 jobs for the course of the agreement.”
- SupportedPécresse said, “Above a certain level of price of aluminium, the level of [funding] support disappears.”Latest business news: “Jérôme Pécresse says "above a certain level of price of aluminium, the level of [funding] support disappears".”
- SupportedAyres said the package had “sensible safeguards” and required Bell Bay Aluminium to deliver “green aluminium, jobs and investment in the region”.Latest business news: “Minister Ayres confirmed the support package contained "sensible safeguards" and required Bell Bay Aluminium to continue delivering "green aluminium, jobs and investment in the region".”
- SupportedHydro Tasmania said it does not seek the highest possible price for power and balances commercial operations with the lowest possible power prices.Latest business news: “Hydro Tasmania does not seek the highest possible price for power when negotiating with our major industrials. “We take our obligations under the Government Business Enterprises Act and the Ministerial Charter seriously. “This includes Hydro Tasmania operating commercially and as a sustainable business so we can continue delivering value back to Tasmania, while balancing the lowest possible power prices.”