Midal Cable International, which is part of the Midal group based in the Kingdom of Bahrain, has put forward the development and if approved it would process a maximum of 55,000 tonnes of aluminium annually and employ up to 161 people.

The plant would be located on 2.8 hectares of land adjacent to the east of Tomago Aluminium and would mean the smelter's exports of ingots, metal that is cast into a shape for further processing, would reduce with aluminium going directly to the manufacturing plant as a molten source.

Tomago Aluminium's communication leader Anita Hugo said Midal and the smelter signed a land and supply agreement at the beginning of 2011 and would work together to produce "value add products" such as aluminium rods for export and aluminium conductors- a first for Australia.

The news comes after a rocky six months for the smelter which announced a restructure and subsequent 100 job losses in January and was hit with the announcements of a carbon tax and that majority shareholder Rio Tinto plans to sell its shares in the business.

Initially the plant would take 25,000 tonnes of aluminium from the smelter annually, before increasing its intake to 50,000 tonnes, which would equate to 10 per cent of Tomago Aluminium's annual production. While Ms Hugo said while the exact potential export savings and profits were "hard to determine" she said the proposal would help secure the aluminium industry in the area.

"It's a significant show of faith in Tomago and our ability to sustain the organisation into the future," she said.

It is proposed that the site will operate 24 hours a day, on a 12-hour shift rotation, seven days a week. As part of the development a 150-metre long haul road from the Tomago Aluminium Smelter to the site will need to be constructed, along with two large buildings for the main manufacturing plant with several smaller buildings to provide workshops and storage. Plans for the development are with the state government and are on exhibition until March 19 on the NSW Department of Planning's website at www.planning.nsw.gov.au.