George Town was envisioned as a town thriving on manganese and aluminium smelting jobs for many years to come. New homes and businesses have emerged, anticipating a steady influx of residents into this northern Tasmanian community.
However, following the liquidation of the nearby manganese smelter, there are growing concerns that the local economy could face a severe downturn if the Bell Bay aluminium smelter experiences a similar fate. Owned by Rio Tinto, the aluminium facility is currently in a precarious position, with its power agreement with Hydro Tasmania set to expire at the end of this year.
Local residents are expressing frustration over the absence of federal government support, which has been extended to Rio Tinto’s aluminium smelters in New South Wales and Queensland but has yet to materialize for Tasmania.
In light of these developments, there is a palpable sense of urgency in George Town, as unions and industry groups engage in a vigorous campaign to ensure the smelter remains operational. Andy Reece, a former employee of both the manganese and aluminium smelters, offers a stark perspective on the town’s future should Bell Bay Aluminium close. “It would be like turning the lights off. What else is there for this town?” he stated. “Losing so many jobs would be devastating for a small community.”
Negotiations between Rio Tinto and Hydro Tasmania over a new ten-year power contract for the Bell Bay facility have been ongoing for over two years. The two parties have struggled to find common ground, resulting in only a temporary one-year agreement reached last November after state government intervention. As of now, they remain at an impasse, with Tasmanian Energy Minister Nick Duigan indicating that the two sides are approximately $60 million apart annually, amounting to a $600 million gap over the duration of the proposed contract.
Susie Bower, representing the Bell Bay Advanced Manufacturing Zone, emphasizes the necessity of finalizing a deal by the end of the month to provide reassurance to workers and local residents. “We’ve already faced significant repercussions from the closure of Liberty Bell Bay. If we were to lose Bell Bay Aluminium, I don’t believe we could withstand another blow,” she remarked. “I witnessed the moment 217 individuals were informed they had lost their jobs. I do not want to repeat that experience for another 550 in the near future.”
Bower highlights the potential fallout, noting that the collapse of the aluminium smelter would have a ripple effect on many local businesses in its supply chain. A local engineering firm recently indicated it would have to lay off more than half of its workforce of 80 if the smelter shuts down. “This is just one instance. Bell Bay Aluminium has over 200 businesses in its supply chain, so you can imagine the broader implications,” she added. “The consequences would be catastrophic for our state.”
The Tasmanian government continues to advocate for the smelter to receive financial assistance from the federal government’s upcoming $2 billion green aluminium credit scheme, which is expected to launch in two years. Recently, discussions have begun with federal Industry Minister Tim Ayres about a potential bailout for the smelter after being informed it was ineligible for the previously mentioned funding. Ayres has not dismissed the possibility of federal intervention similar to the substantial bailouts provided to Rio Tinto’s aluminium operations in other states. “We are in discussions with both Rio Tinto and the Tasmanian government. We recognize the urgency of the situation, but the immediate focus must be on resolving the power purchasing agreement,” he stated.
Professor Roy Green from UNSW asserts that it is often beneficial for the public to support smelters in distress. “We cannot afford to lose crucial segments of our manufacturing sector, as we have done in the past,” he remarked. “We now live in a world where maintaining sovereign manufacturing capabilities is essential to mitigate vulnerabilities associated with global geopolitical changes.” He acknowledges the significance of Bell Bay to both the Australian and Tasmanian economies, yet he questions whether federal funding would be a prudent allocation of taxpayer resources.
Mr. Ayres refrained from commenting on the ongoing negotiations but reiterated his commitment to securing a resolution. He expressed his discontent regarding the closure of the Sanjeev Gupta-owned manganese smelter, stating it has dealt a harsh blow to northern Tasmania. “I am extremely frustrated and disappointed by the outcome,” he noted. “The facility suffered from inadequate capital investment and poor management by its former owner, resulting in significant consequences for the people of Tasmania.”
A report from the administrator and current liquidator EY revealed that Liberty Bell Bay may have been operating while insolvent as early as May 2025, when production was halted due to ore supply issues. The facility never resumed operations and entered liquidation in August after talks with potential buyers failed. The report also indicated that Mr. Gupta had loaned $191 million from Liberty Bell Bay to other businesses within his GFG Alliance, leaving the smelter with limited financial resources to navigate supply chain disruptions and fluctuating commodity prices that affected profitability.
Dean Gibbons, a former worker with 40 years of experience at Liberty Bell Bay, attributes much of the responsibility for the closure to Mr. Gupta, citing a long-standing lack of necessary capital investment. “It was evident to all of us that significant funds were needed for upgrades, given the aging infrastructure. We were often told there was no budget for that,” he recounted. “Even the canteen was in disrepair, covered with a tarp. It resembled something out of a movie about dilapidated factories.”
