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【Ferro-alloys.com】: Australia's Labor government has announced a $1.25 billion (AU$2 billion) initiative to aid the nation's aluminum smelters.

This move underscores the government’s commitment to a renewable energy transition by 2036, as well as an economic transformation ahead of the general elections scheduled for May at the latest.

Prime Minister Anthony Albanese unveiled the plan: "We've got all the ingredients right here for a world-leading metals industry — from the best solar and wind resources, to the critical minerals and facilities, as well as a highly skilled workforce," he said in an X post on Sunday, Jan. 19.

The government aims for 82% of the national energy supply to come from renewables by 2030, a leap from the current 40%, even as it faces infrastructure and supply challenges — particularly with energy costs that broadly fluctuate between its territories.

As a part of the "Future Made in Australia" program, the funding will provide production credits to aluminum smelters. This is expected to incentivize the production of low-carbon aluminum created using renewable energy resources.

Australia currently ranks as the world's sixth-largest aluminum producer.

"These new aluminum production credits should provide some of the transitional support needed as Australia's energy infrastructure and systems develop, and energy pricing returns to competitive levels," noted Marghanita Johnson, Australian Aluminum Council CEO.

However, challenges persist, particularly with securing affordable renewable energy to meet targets

Tomago Aluminum CEO Jerome Dozol recently warned about overly optimistic government goals.

"The price of electricity on offer is too expensive for us to keep operating without government intervention," he said, per AFR's report. Tomago, the country's largest aluminum smelter (majority-owned by Rio Tinto), aims to fully transition to renewables by 2035.

Australia's aluminum industry faces stiff global competition and high energy costs. Tomago, which produces 590,000 tons of aluminum annually, is a critical player, contributing AU$2.2 billion to the economy.

Despite challenges, optimism remains. "Governments are recognizing the problem and the benefits of interim aid for a strong aluminum sector," Dozol stated.

• [Editor:Alakay]