A Newcastle-based networking venture, which fosters collaboration, connectivity and inclusivity, is offering a simple solution to secure Tomago Aluminium’s future.

Hunter iF and its members are strongly urging the state and federal governments to proactively utilise strategic mechanisms, such as the Special Finance Vehicle (SFV), to establish a commercially viable pathway for the embattled smelter.

But, critical talks were required before the employee consultation period, recently undertaken by owner Rio Tinto, concludes on 21 November.

“The situation at Tomago is one that extends well beyond the Hunter region,” chair Alex Brennan said.

“It’s not only a major employer but also functions as a necessary synchronous condenser for grid stability in NSW.

“So, the current state-of-affairs reflects the national challenge of ensuring our heavy industry remains competitive during the energy transition.

“With the imminent closure of another major employer at BHP’s Mount Arthur in 2030, it’s critical that we come together to ensure Tomago Aluminium – which supports more than 3,000 regional jobs and a vital $6 billion sovereign sector – continues to play an important role in the economy.

“The SFV model is a proven strategic tool to de-risk and accelerate the deployment of large-scale renewable energy infrastructure.

“It’ll directly link Tomago’s need for a stable, long-term power supply through a Power Purchase Agreement (PPA).”

A creative, public-private partnership approach, such as the SFV, is being championed by innovation and industrial policy expert Professor Roy Green and founding CEO of the CEFC and Climate Finance Leader, Oliver Yates.

“The fundamental challenge for Tomago Aluminium is its power price, which is about 40% of its cost,” the former explained.

“The advantage of the Special Finance Vehicle is that it uses government-backed finance to significantly lower the cost of capital for new renewable energy projects.

“Thereby, that allows us to guarantee Tomago a stable, long-term power price.

“This is not a temporary subsidy; it is a smart, structural investment to drive industrial decarbonisation and economic resilience.

“Furthermore, this is not a new idea.

“It remains a proven financial structure, effectively used by Neville Wran in the 1980s to secure coal-fired power for industry.

So, it can be applied just as effectively today for the new era of clean energy transition.”

Leveraging proven models for success

Implementing such a solution would draw upon successful precedents, both local and international:

• Local Example (PPA): The Hunter Joint Organisation (JO) has successfully coordinated a collective PPA for numerous regional councils, demonstrating how grouping demand can lock in competitive rates and provide budget certainty—the precise function Tomago requires at scale
• National Funding Potential (SFV): The National Reconstruction Fund (NRF) and the Clean Energy Finance Corporation (CEFC) are ideally positioned to act as cornerstone investors in the SFV, aligning their mandates to support strategic manufacturing and the clean energy transition
• European Example (SFV): The German-Australian H2Global Initiative offers a compelling international model where a government-backed SFV uses competitive offtake agreements to bridge market risk, effectively ensuring commercial certainty for both clean energy producers and industrial consumers

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