Over 1000 staff at Australia's biggest aluminum smelter have been warned that the plant's future is in doubt as government negotiations over untenable energy costs stall.

Rio Tinto-owned Tomago Aluminium said it has reached a "difficult point" and has started a consultation process with employees for when its electricity contract with AGL expires in 2028.

The miner said it has been undertaking a "comprehensive market-sounding process" to reach a solution for its NSW smelter since 2022, but is yet to identify a commercially-viable path forward.

Tomago has been in years-long talks with state and federal ministers for ways to bring down its soaring energy prices and keep the smelter open.

Tomago chief executive Jérôme Dozol described the projected energy costs as "not commercially

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