Rio is asking for bailouts as power prices are too high to make Aluminium, the price of which has fallen:
The Australian Aluminium Council (AAC), whose members include Rio and US aluminium giant Alcoa, said energy costs had to come down for smelters to survive…
It is understood the Coalition government and Rio have been in talks about a potential rescue package for the at-risk smelters as a downturn in the aluminium market linked to COVID-19 compounds the problem of globally uncompetitive power prices.
Energy Minister Angus Taylor said on Thursday that the government considered Rio’s aluminium smelters to be crucial businesses and employers in NSW, Queensland and Tasmania.
“The government is focused on delivering an affordable and reliable electricity supply, and on ensuring that our energy-intensive, trade-exposed industries like aluminium continue to be viable,” he said…
“Australian electricity prices are currently some of the most expensive in the world and at those prices we are seeing the risk of the same things [smelter closures] happening here.”
If the federal government does go the piecemeal bailout route, they will only lock in subsidised energy shortages for everybody else.
It also ignores the role of the gas cartel in triggering this crisis in the first place.
The real answer is to apply gas reservation to crash utility prices across the board, providing a massive competitiveness lift to the aluminium industry as well as wider businesses, alongside income relief to households.