The collapse of Bell Bay Aluminium smelter could destroy George Town’s local economy
Posted Thu 3 Sep 2026 at 5:30pmThu 3 Sep 2026 at 5:30pmThu 3 Sep 2026 at 5:30pm, updated Thu 3 Sep 2026 at 5:31pmThu 3 Sep 2026 at 5:31pmThu 3 Sep 2026 at 5:31pm
George Town was meant to be reliant on manganese and aluminium smelting jobs for decades to come.
Houses have been built and businesses have banked on people continuing to flock to the northern Tasmanian town.
But after the liquidation of the nearby manganese smelter there are fears the area’s economy will collapse if the Bell Bay aluminium smelter follows suit.
The Rio Tinto-owned aluminium smelter is teetering on the brink. Its power deal with state-owned power producer Hydro Tasmania expires at the end of the year.
Community members are also angry that the same federal government bailouts offered to Rio Tinto’s aluminium smelters in New South Wales and Queensland aren’t yet on the table in Tasmania.
There’s an air of alarm in the town as unions and local industry groups mount a desperate fight to keep it operating.
Andy Reece, who worked at both the manganese and aluminium smelters, is blunt in his assessment of George Town’s future if Bell Bay Aluminium closes.
“You might as well turn the lights off. What’s this town going to survive on?”
Mr Reece said.
“It’s a lot of jobs to lose in a small town.”
$600 million gap in power negotiations
Rio Tinto and Hydro Tasmania have been negotiating for a new 10-year power agreement for the Bell Bay facility for more than two years.
The two parties were previously so far apart that they only agreed to a one-year bridging deal last November, following state government intervention.
Nine months later they are still locked in the same stalemate, with Tasmanian Energy Minister Nick Duigan telling state parliament that Hydro and Rio Tinto are about $60 million a year apart, a cost of $600 million over the ten-year life of the contract.
Susie Bower from industry group Bell Bay Advanced Manufacturing Zone says a deal must be struck by the end of the month to give certainty to workers and the community.
“We’ve taken a major hit with Liberty Bell Bay closing. I don’t think we can survive and take another hit with someone as big as Bell Bay Aluminium collapsing as well,”
she said.
“I was in the room when those 217 people were told they no longer have a job. I don’t want to be doing that for another 550 in another three months’ time.”
Ms Bower says a collapse would have a seismic impact on the many businesses in the aluminium smelter’s supply chain, illustrated by a local engineering firm’s recent claim that it would have to sack more than half of its 80 workers immediately if it were to close.
“That’s just one example of one business. Bell Bay Aluminium have over 200 in their supply chain, so start doing the multiplier effect of that,” she said.
“It is absolutely catastrophic for our state.“
The Tasmanian government has repeatedly pushed for the smelter to receive funding from the federal government’s $2 billion green aluminium credit scheme, set to start in two years’ time.
It has only recently started talks with federal Industry Minister Tim Ayres to bail out the smelter, after it was told it was not eligible for the funding.
Mr Ayres has not ruled out federal intervention, like the billion-dollar-plus bailouts afforded to Rio Tinto’s aluminium smelters in NSW and Queensland.
“We are engaged with Rio Tinto and with the government of Tasmania,” Mr Ayres said.
“We’ll keep talking about these issues and there’s not a lot of time, so we feel a sense of urgency about this, but right now the fair dinkum issue is resolving that power purchasing agreement,” he said.
UNSW economics professor Roy Green says it is often in the public interest for smelters to be bailed out.
“We can’t just let key parts of our manufacturing base disappear as we have in the past,” Professor Green told 7.30.
“We’re now in a very different world where sovereign manufacturing capability counts in order that we don’t become too vulnerable to those external geopolitical shifts”.
But while labelling Bell Bay “absolutely critical” to the Australian and Tasmanian economy, he said it was hard to gauge whether federal intervention would be a good use of taxpayers’ money.
‘Angry’: Ayres lashes Gupta
Mr Ayres declined to comment on the negotiations but said he was focused on securing a deal.
He said the closure of the Sanjeev Gupta-owned manganese smelter had been a “pretty tough knock” for Tasmania’s north.
“I’m beyond angry and disappointed with that result,” Mr Ayres said.
“That facility, it was undercapitalised and not run responsibly by its previous owner, and Tasmanians have paid the price for that.“
A report from administrator and now liquidator EY found Liberty Bell Bay may have been operating while insolvent as far back as May 2025, when production was paused due to ore supply issues.
The smelter never restarted operations and was formally placed into liquidation in August after talks with potential buyers fell over.
The EY report also found Mr Gupta loaned $191 million of Liberty Bell Bay’s money to his other GFG Alliance businesses, leaving the smelter “very limited cash resources to withstand supply chain difficulties and commodity price fluctuations which have impacted profitability”.
Former Liberty Bell Bay worker Dean GIbbons, who worked at the smelter for 40 years, directs much of the blame for the closure towards Mr Gupta.
He says a lack of capital investment in the facility was evident to the staff for many years.
“A lot of capital needed to be spent because it was an aging site. And we kept hearing, ‘Oh no, there’s no money for that,'” he said.
“Even the canteen was closed and they had a tarp over the roof of it. It’s sort of like what you see in the movies, run down plants.
“And that was the downfall in the end because if the previous owner had have spent more or some capital, he could have still been making money out of the site, so it was frustrating to see.”
After finding himself on the job market for the first time in decades, Mr Gibbons will start permanent work in a warehouse.
He says the closure has taken a toll on him and his colleagues.
“In my work group, there’s been three marriage break-ups,” he said.
“We had a lot of banter which was good for our own mental health, but it certainly hasn’t been pleasant that’s for sure.”
Like most in Tasmania’s north, Mr Gibbons hopes the state and federal government can do a deal to save the aluminium smelter from closing.
“If there was money for New South Wales and not Tasmania, it’s just unforgivable, I believe,” he said.
“People are outraged enough, I think, with Liberty Bell Bay not being saved.
“So if Bell Bay Aluminum went under there would almost be a public riot.“
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