Tasmania's Bell Bay Aluminium smelter, one of the largest in the country, was given a lifeline on Thursday through a $200 million joint support package from the state and federal governments.
It was also announced that after intense negotiations for several years, a five-year power deal had been sealed by owner Rio Tinto and state-owned power company Hydro Tasmania.
There was a $60 million-a-year shortfall between what owner Rio Tinto was willing to pay and what state-owned power company Hydro Tasmania could commercially offer, with the bailout making up the difference.
The funding was necessary because it was not viable for Hydro Tasmania to negotiate outside of commercial terms, the company's chief executive Rachel Watson said.
''This deal continues Hydro Tasmania's long and productive relationship with Rio Tinto Bell Bay Aluminium,'' she said.
"We look forward to continuing to work together over coming weeks to agree the final details of the arrangements."
The power deal and government bailout secures the immediate future of the facility, the positions of its 550 workers and the jobs of 1000 more workers indirectly supported by the site, according to a joint statement from the state and federal governments.
The bailout was in the national interest because it would bolster industrial capacity and the value of the jobs to the Tasmanian economy was "immense", Industry Minister Tim Ayres said.
Opposition Leader Angus Taylor in contrast characterised the bailout as a "band-aid on a bullet wound" and blasted what he described as the federal Labor government's botched energy policies.
"They should be dealing with the bullet wound, which is to scrap net zero today. Get rid of it," he told News24.
The funding package covers the coming five years, half of the decade-long period of security the parties were trying to negotiate.
But the deal still came as a relief to workers whose jobs hung in the balance.
The years of uncertainty over the site's future had been challenging, Bell Bay general manager Richard Curtis said.
"But the professionalism, the patience and the resilience of our people, the local community, and everybody in the supply chain here have helped support this positive outcome," he told reporters.
Tasmanian Premier Jeremy Rockliff said a three-way partnership between the federal and state governments and Rio Tinto was the only way to keep the smelter open and bolster local employment.
The deal had hinged on the smelter's operators being able to lock in a favourable power deal for the energy-hungry operation, which uses more than 25 per cent of Tasmania's total electricity supply.
"This is a good deal for Tasmania (and) a great deal, of course, for the workforce to secure their future," Mr Rockliff said, announcing the package alongside Prime Minister Anthony Albanese.
It would allow for about $5 billion to be injected into the northern Tasmanian economy over the next five years, he said.
The site is Australia's oldest aluminium smelter, beginning operations in 1955, and produces about 190,000 tonnes of the metal annually, the majority which goes for export.
Workers were already on edge following the July closure of the nation's only commercial manganese alloy smelter at nearby Liberty Bell Bay, leading to the loss of 200 jobs.
Calls for federal government help ramped up in August after Australia's largest aluminium smelter, at Tomago in the NSW Hunter region, received a $2.5 billion bailout.
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