Aluminium to forge Australia’s manufacturing future

The Federal Government is investing a record $2b into the Australian-made aluminium industry in a move to secure more well-paid jobs for workers.

Supercharging the local metals industry, a new Green Aluminium Production Credit will provide targeted support to Australian aluminium smelters switching to reliable, renewable electricity before 2036.

Facilities will be eligible for support for every tonne of clean, reliable Australian-made aluminium they make over a period of 10 years.

This credit will provide local aluminium smelters with confidence to invest, which the Federal Government says will pave the way for more secure Australian jobs in our world-class aluminium industry.

Prime Minister Anthony Albanese says the Federal Government’s plan for a Future Made in Australia is very clear: the Federal Government wants Australia to make more things here.

“Investing in the Australian-made aluminium industry is a massive opportunity — to create well-paid jobs in our regions and suburbs and set Australia up for the future,” he said.

“We’ve got the resources, the workers, and the know-how — the only thing we don’t have is time to waste.

“We are building Australia’s future, not taking Australia backwards.”

Federal Industry and Science Minister Ed Husic comments on the plan.

“Jobs up, emissions down and a secure future for our world-class aluminium industry —that’s what today’s announcement provides,” he said.

“With an entire aluminium supply chain uniquely located right here in Australia, we’re well positioned to capture the rewards of the global green energy transition.

“Communities and businesses rely on aluminium smelters, and we have an opportunity to partner with the private sector to support these secure well-paying jobs into the future.

“Backing our strengths, playing to our advantages and building a future for all Australians.”

Federal Future Made in Australia Assistant Minister Tim Ayres says the aluminium sector is a critical value-add industry for Australia and a crucial part of the Federal Government’s Future Made in Australia plan.

“This package guarantees good blue-collar jobs in the Hunter, Central Queensland, Northern Tasmania, WA and Victoria,” he said.

The WA Chamber of Minerals and Energy (WA CME) has also acknowledged the production credit, saying it shows the Federal Government is serious about supporting the decarbonisation of heavy industries.

Aluminium has been made in Australia for 70 years. The industry generated $18b in 2024 and employs thousands of Australians in regional communities, including in WA through bauxite mining and alumina refining, according to the WA CME.

WA CME acting chief executive Adrienne LaBombard says the credit is a positive step towards safeguarding Australia’s aluminium industry but additional measures targeting other commodities are also required.

“We hope this announcement is the first of more to come, specifically supporting the development of other green materials in WA, such as green iron and green alumina,” she said.

“Maintaining Australia’s existing upstream and downstream industry while seizing the new opportunities on offer through the energy transition will require ongoing and holistic policy support.

“It’s pleasing to see the aluminium incentive is structured to be stackable with other incentives proposed as part of the Future Made in Australia Plan.

“[WA] CME is continuing discussions with the Federal Government for a green iron production credit that is also stackable with other proposed incentives, such as the $2/kg hydrogen [priority transmission investment] PTI.”

A WA CME report released in December found large-scale production of green iron in WA had the potential to slash global carbon dioxide emissions by 1.2%, create nearly 20,000 jobs and generate $74b in economic value.

However, establishing a green iron industry of that scale requires the commercialisation of new technologies and processes as well as significant public and private investment in low-emission energy and supporting infrastructure such as ports, roads and desalination plants.

“Our report found WA-made green iron, produced with hydrogen instead of coal, has the potential to offset nearly all of Australia’s 465mt of domestic carbon dioxide emissions by 2050,” Ms LaBombard said.

“Industry is already investing to unlock the immense potential on offer but will require government support.

“That must include an expansion of R&D funding, further tax incentives and substantial additional investment in lowering the cost of low-emissions energy and the rollout of common-user infrastructure.”

Rio Tinto (ASX: RIO) also chimed in on the production credit, saying it will help sustain and grow aluminium smelting in Australia and significantly advance both regional communities and the nation’s manufacturing capabilities.

The company also says this puts Australia on a path to becoming a leader in green metals manufacturing, while supporting a continued strong economic future for communities that have powered the nation’s aluminium industry for generations.

Rio Tinto says the support comes at a pivotal time for Australia’s aluminium sector, as major manufacturers and infrastructure developers worldwide increasingly seek supply of low-carbon material, driving growing demand for sustainably produced products.

Rio Tinto Australia chief executive Kellie Parker says the Federal Government’s commitment shows strong confidence in domestic manufacturing and the nation’s position in the global economy.

“As traditional energy sources for heavy industry become increasingly uncompetitive, today’s announcement is a critical piece in helping future proof the industry,” she said.

“Such support is crucial for sustaining and growing regional economies.

“As global industrial customers and consumers increasingly focus on low-carbon products, this support signals Australia’s potential to be a major supplier of the aluminium needed for the global energy transition, creating a foundation for local businesses and manufacturing to thrive.”

The announcement builds on Rio Tinto’s partnership with the Queensland Government, announced in August 2024, to support Boyne Smelters (BSL’s) transition to renewable energy, as well as Rio Tinto’s strong progress in securing renewable power to provide competitively priced electricity for its aluminium operations.

This includes signing Australia’s largest renewable power purchase agreement in early 2024 to supply its Gladstone aluminium operations, whereby Rio Tinto will purchase the majority of electricity from Windlab’s planned 1.4GW Bungaban wind energy project, and an earlier agreement with European Energy to drive development of the 1.1GW Upper Calliope solar farm.

According to Rio Tinto, these projects will make it the biggest industrial buyer of renewable power in Australia.