Federal Industry Minister Tim Ayres has declined to confirm whether Bell Bay Aluminium will receive federal funding, as the future of the critical Tasmanian smelter remains uncertain. The Minister’s comments come amidst ongoing negotiations for a long-term power deal for the Rio Tinto-owned facility and growing calls from the Tasmanian government for equitable federal support.
Bell Bay Aluminium, a major employer in Tasmania’s north with approximately 550 staff, recently secured an in-principle 12-month extension to its power contract with state-owned Hydro Tasmania. This extension ensures the smelter’s operation until at least December 31, 2026, buying time for a more permanent agreement to be reached. The plant is a significant contributor to the state’s economy, generating around $700 million annually and supporting hundreds of local businesses.
However, a substantial hurdle remains: an estimated $60 million annual gap between the power price Rio Tinto seeks and what Hydro Tasmania can commercially offer.
The debate over federal assistance intensified following the recent announcement of a $2.5 billion support package from the federal and New South Wales governments for Rio Tinto’s Tomago aluminium smelter. This deal aims to keep the NSW facility operating, with a commitment to transition to 100 per cent renewable energy by 2033.
Tasmanian Premier Jeremy Rockliff and Minister for Business, Industry and Resources Felix Ellis have strongly criticised the disparity in federal backing. Premier Rockliff stated that Tasmanian industrial workers deserve the same support as their counterparts on the mainland, arguing that “if there is a billion dollars for Tomago, there is money for Tasmania.” The Tasmanian Parliament unanimously voted on August 12, 2026, to urge the Federal Labor Government to commit to supporting Bell Bay Aluminium.
A key point of contention is the federal government’s $2 billion Green Aluminium Production Credit scheme. While Industry Minister Tim Ayres publicly indicated in January 2025 that Bell Bay would be eligible, federal Bass MP Jess Teesdale stated in July 2026 that the smelter is currently ineligible. Ms Teesdale explained that the credits are designed for coal-burning smelters transitioning to renewables, not for Bell Bay, which already operates on hydroelectric power. This has been described as a “direct reversal” of the earlier federal position.
During an interview with ABC Hobart’s Leon Compton on August 18, 2026, Minister Ayres reportedly “dodged questions” regarding Bell Bay’s eligibility for federal funding. He maintained that negotiations between Rio Tinto and Hydro Tasmania should be resolved in the state’s interest.
The Australian Manufacturing Workers’ Union Tasmania secretary, Jacob Batt, has called for state government intervention, while independent economist Saul Eslake has advocated for transparency in any power deal involving below-market prices.
For more details, readers can listen to the original ABC News (Tasmania) report.