Rio Tinto is negotiating a bailout for an Australian aluminum plant, according to AFR

Rio Tinto (RIO.AX), a multinational mining company, is negotiating a multibillion-dollar bailout for its troubled Tomago aluminum smelter in the state of New South Wales with the federal and state governments of Australia, according to the Australian Financial Review.

Talks focused on federal production tax credits and the smelter’s 2026–2029 electricity contract, the newspaper claimed late Friday, citing unnamed sources.

When Reuters asked Rio and the offices of Prime Minister Anthony Albanese and Premier Chris Minns of New South Wales for comment on the report, they did not immediately reply.

According to the report, the facility, which is primarily owned by Rio, has been facing uncertainty for months because of skyrocketing energy costs.

Rio, which produces the most iron ore worldwide, stated in February that it will make a decision by the middle of the year about the smelter.

About 10% of New South Wales’ electricity is used at the factory, which is located 125 km (80 miles) north of Sydney, the state capital, to create 590,000 tonnes of aluminum annually. It is owned by CSR and Hydro Aluminium in addition to Rio.

A$2 billion in production credits were promised by Australia’s center-left government in January to assist the nation’s four aluminum smelters, including the Tomago complex, in making the transition to renewable energy by 2036.