Australia's biggest aluminium smelter is at risk of closing, putting 1000 jobs under threat as leaders pledge to do everything possible to keep the facility open.
Tomago Aluminium, which is majority owned by Rio Tinto, said high energy costs had forced the company to consider ending operations when its electricity supply contracts expire in 2028.
The consultation process is set to run until November 21, but Tomago Aluminium's chief executive Jerome Dozol said the outcome was uncertain.
Industry Minister Tim Ayres said the government had put an offer to the company, adding the facility was critical to Australia's national interests.
"I am determined to exhaust every opportunity to secure the future of that site for the Hunter Valley, for the NSW economy, for Australian aluminium production more broadly, and for Australia's economy," he said on Tuesday.
The site produces almost 40 per cent of the nation's aluminium and its struggles follow bailouts for several other smelters and refineries, including a multibillion-dollar package to save South Australia's Whyalla steelworks.
Swiss mining giant Glencore in October received a $600 million injection as part of a joint federal and state deal to keep Queensland's Mount Isa copper smelter and Townsville copper refinery open, securing about 600 jobs.
But Senator Ayres pushed back when asked if the mining giant and its partners would be offered a blank cheque that left taxpayers footing the bill.
"They are big contributions, but they are weighted to achieve the Australian national interest here - which is about jobs, but it's also about economic resilience and it's also about the future of our manufacturing sector," he said.
Representatives for Tomago were previously in talks with the federal and NSW government over a bailout reportedly worth more than $1 billion.
NSW Premier Chris Minns said his government was concerned to hear about the consultation and it would be "uncertain and distressing news" for workers.
State officials had been working closely with the operators and the Commonwealth for months about the future of the smelter, he said in a joint statement.
Electricity already makes up more than 40 per cent of the company's operating costs which produces nearly 600,000 tonnes of aluminium a year, the firm said.
As its contract with AGL nears its December 2028 endpoint, future electricity supply options would significantly increase costs and leave the operation unviable.
"Unfortunately, all market proposals received so far show future energy prices are not commercially viable," Mr Dozol said.
The smelter, located about 13km west of Newcastle, employs more than 1000 staff from an area spanning from the Hunter Valley to the Central Coast.
About 90 per cent of its product is exported to the Asia-Pacific region.
Greens senator Penny Allman-Payne said bailouts were not the solution.
"This is an opportunity to both put workers first and accelerate the transition out of fossil fuels, not just deliver another Glencore-style corporate bailout that offers no public benefit," she said.
"We can't keep doling out public cash to billionaires and big corporations without expecting a return."
Bell Bay Aluminium in Tasmania, which is also owned by Rio Tinto, is facing a potential shutdown as a 10-year deal with Hydro Tasmania nears its December 31 deadline.
