Rio Tinto and the Tasmanian and Australian governments have agreed to keep the Bell Bay Aluminium smelter in northern Tasmania running until the end of 2031. The deal secures its electricity supply and about 550 direct jobs.
At a glance
- Hydro Tasmania will keep supplying electricity to Bell Bay until 31 December 2031, extending a contract due to end in 2026.
- Both governments will provide additional support, though the amount has not been disclosed.
- The smelter produces about 190,000 tonnes of aluminium a year and employs about 550 people directly.
Background
Aluminium smelting uses enormous amounts of electricity, so a smelter's future usually depends on its power contract. Bell Bay, owned entirely by Rio Tinto, opened in 1955 and was the first aluminium smelter in the Southern Hemisphere. It runs on power from Hydro Tasmania, the state-owned electricity producer.
What happened
Rio Tinto, the Tasmanian Government and the Australian Government have reached an agreement to keep Bell Bay Aluminium operating through to the end of 2031. Hydro Tasmania will continue supplying electricity until 31 December 2031. Its current arrangement had been due to end on 31 December 2026.
The two governments will also provide additional support to keep the smelter running as Tasmania's energy system changes. The value of that support was not disclosed.
Why it matters locally
Bell Bay, wholly owned by Rio Tinto, opened in 1955 as the first aluminium smelter in the Southern Hemisphere. It produces about 190,000 tonnes of aluminium a year. It employs about 550 people full time, supports more than 1,200 jobs indirectly, and spends about A$260 million a year with 180 suppliers.
Jérôme Pécresse, chief executive of Rio Tinto Aluminium & Lithium, said the agreements give the smelter "an operating pathway through to 2031". He added that they bring "increased certainty for our people, suppliers and the northern Tasmanian community".
What it means
Without a power deal, an older smelter like Bell Bay can be at risk of closing, which would remove supply from the market. Keeping it running holds about 190,000 tonnes a year of aluminium in production for five more years.
The agreement does not say what happens after 2031. Any future beyond that date will again depend on electricity costs and government support.
Our read
Outlook: neutral. The deal keeps existing supply in place rather than adding new metal. It removes a closure risk that could have tightened the market.
What to watch
- Details of the government support package for Bell Bay.
- Plans for the smelter beyond 2031.
- Other power-dependent smelters seeking similar deals.
For information only, not investment advice.
Aluminium price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-09-30: Rio Tinto and the Tasmanian and Australian governments agree to keep Bell Bay running until the end of 2031.
Supply Drivers
The deal keeps about 190,000 tonnes a year of aluminium production running until 2031.
Government Policies
The Tasmanian and Australian governments will provide additional, undisclosed support for the smelter.
What could lift prices
- The agreement runs only to 2031, leaving a longer-term question mark over the smelter.
- Power costs remain a constant risk for smelters worldwide.
What could weigh on prices
- A closure risk for 190,000 tonnes a year of supply has been removed for now.
- Government support helps keep existing smelters running rather than shutting.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Australia | Medium | The deal protects about 550 direct jobs and more than 1,200 indirect jobs in Tasmania. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Aluminium Smelting | Positive | A long-running smelter gains a secure power supply for five more years. |
Who gains, who loses
- Bell Bay workers and suppliers: About 550 jobs and A$260 million a year of supplier spending are secured until 2031.
- Taxpayers: Governments are providing additional support whose cost has not been disclosed.
Other ways this could play out
- If power costs fall, Bell Bay could seek another extension beyond 2031.
- If support is withdrawn later, closure could return as a risk after 2031.
Price risks
- Global aluminium prices depend far more on China and energy costs than on one smelter.
- Undisclosed support terms could change.
Historical comparison
- 1955: Bell Bay began operating as the first aluminium smelter in the Southern Hemisphere.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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