Keeping Tomago open and keeping metals refining in Australia is important. This is important for local jobs, Australia’s wider industrial development and the shift to green metals.

But before governments hand over public money, it’s important to understand what has caused the problem.

While big companies ask for subsidies regularly, this time taxpayers are being asked to bail out Rio Tinto as a direct result of Australia’s excessive gas exports.

It is the gas companies that are to blame for the energy cost increases that Rio claims threaten Tomago’s future.

Let me explain.

Making aluminium involves huge amounts of electricity. Resource economists like to joke (we really do) that aluminium is just “congealed electricity”.

In Australia, the wholesale electricity price is largely set by the wholesale gas price. In fact, there is a “near-perfect correlation between natural gas prices and electricity prices in Australia’s National Electricity Market”.

That’s because, renewables offer their electricity to the market first because their costs are very low once they’re built (and if weather conditions are good).

Coal-fired generators usually come next because they can’t adjust their output up or down particularly quickly.

This leaves more flexible electricity sources to fill in the final amount of electricity required, and because meeting demand depends on them they get to set the price.

This role is played by batteries, hydro and particularly by gas-fired generators.

Before gas exports started out of Queensland, the wholesale gas price in Australia was $3-4 a gigajoule (GJ). A gigajoule is roughly two backyard barbecue gas bottles.

Since exports started in 2014, gas companies have had the choice between selling Australian gas to Australians or selling it to high-priced world markets. This has dragged Australian prices up to world price levels and as a result, Australia’s wholesale price has been routinely over $10/GJ, and often lots more.

To be clear, it is gas exports that are causing the high energy prices that threaten the Tomago smelter.

I’m going to write that again. It is gas exports that are causing the high energy prices that threaten the Tomago smelter.

It’s necessary to repeat that, because while it should be obvious, no one else is saying it.

Here’s the quote from the Rio Tinto boss in The Australian Financial Review: “The problem we are facing with a place like Tomago right now is it might take us a longer time to get renewables, and the electricity from coal-fired power, what we have been quoted, is extremely expensive.”

Sure, renewables should be built faster. And of course it is expensive to keep ancient coal-fired generators going. But the word “gas” doesn’t appear in that whole article. Or in the February AFR piece where that quote first appeared. Or in this one.

Why won’t Australia’s corporate leaders call out the gas industry’s role in damaging other industries?

It’s the same reason that Australia’s political leaders say nothing while the gas industry destroys indigenous heritage in north Western Australia, simultaneously threatening the most iconic coastline in south-eastern Australia, while paying minimal tax and increasing prices everywhere in between.

It’s because the gas industry is powerful. Both corporate leaders and political leaders fear backlash from the gas industry on their companies and parties.

They might also have eyes on a well-paid next job in the gas industry, as many colleagues have.

But recent efforts by The Australia Institute and others to highlight the parasitic role that the gas industry plays in Australia have started to pay off.

In the 2025 election campaign, Peter Dutton promised to restrict gas exports, sending the gas industry berserk.

Labor’s Chris Bowen followed, admitting that Australia had no gas shortage and that exports are a major part of energy policy problems.

In fact, politicians across the spectrum said they wanted to fix Australia’s gas export problem.

This kind of change shows that the gas industry can be tamed and that it can be held to account for the costs that it imposes on Australia while contributing so little.

So what will the progressive patriots in the Albanese government do?

Will they let Australia’s biggest aluminium smelter fail?

Will they make the Australian public pick up the bill to keep all the multinational companies happy, or will they make the gas exporters provide Australian gas to keep Australian metal refining?

The gas industry has been making out like a bandit in recent years. It’s time it was made to pay back through a revamped tax system and restrictions on exports.