Rio Tinto, in collaboration with the Queensland Government and the Commonwealth Government, has entered into a landmark partnership aimed at securing a long-term and internationally competitive future for the Boyne aluminium smelter at Gladstone. This move ensures the facility’s viability beyond its current electricity supply agreement and underscores its significance within the local and national industry.
The partnership not only secures long-term competitiveness but also drives major investments in renewable energy. Specifically, Rio Tinto has signed power purchase agreements (PPAs)—contracts to buy electricity from energy producers—in recent years, underwriting A$7.5 billion ($5.2 billion) in new renewable energy and storage projects across Queensland. These efforts support the transition to cleaner energy sources and reinforce the state’s industrial base.
Under the agreement, the Queensland and Commonwealth Governments will invest a combined A$2 billion over ten years, running through to 2040. This finalises the terms of an earlier partnership between Queensland and Rio Tinto and is a key element of the Federal Government’s Future Made in Australia initiative. The joint commitment aims to provide long-term, competitive power for the smelter and safeguard manufacturing jobs in Central Queensland for the foreseeable future.
Furthermore, the partnership is underpinned by what will become some of Australia’s largest investments in solar and wind power, with Rio Tinto supporting these projects through its PPAs. As a result, Boyne Smelters Limited—the owner of the smelter in which Rio Tinto holds a majority stake—will continue aluminium production beyond the expiration of its current electricity contract in 2029, with operations secured at least until 2040.
Rio Tinto Aluminium & Lithium Chief Executive, Jérôme Pécresse, commented, “This transformative partnership with the Queensland and Australian governments will ensure Boyne Smelter remains internationally competitive, strengthens the Australian aluminium sector for the future and supports the transformation and decarbonisation of the Queensland energy system.”
He added, “As fossil fuels become increasingly expensive, this investment, combined with the power purchase agreements we have already signed, positions Boyne to be among the world’s first aluminium smelters underpinned by solar and wind power.”
“It also ensures heavy manufacturing like aluminium smelting can continue in Gladstone for the long term and preserves one of the few fully integrated aluminium value chains in the world—from bauxite mining to alumina refining to aluminium smelting all in Queensland—as demand for aluminium continues to grow with the energy transition.”
In addition, Rio Tinto has agreed to purchase 40% of the output from Lightsource bp’s Lower Wonga solar and battery hybrid project near Gympie. This equates to 112 megawatts (MW) of alternating current solar capacity and approximately three hours of battery storage. With this latest agreement, Rio Tinto’s total renewable power contracted in Queensland exceeds 2.8 GW (gigawatts).
Boyne Smelters Limited (BSL), which has been operational since 1982, is Australia’s second largest aluminium smelter. Located at Boyne Island in central Queensland, BSL’s operations include manufacturing carbon anodes, producing aluminium through smelting, and casting molten metal into finished products ready for shipping. The smelter is directly connected via conveyor to the Queensland Alumina Limited refinery for the supply of alumina. Ownership of BSL is divided among Rio Tinto (73.5%), YKK Aluminium (9.5%), UACJ (9.29%), and Southern Cross Aluminium (7.71%).This initiative is expected to create new jobs in Central Queensland, support local communities, and contribute to Australia’s efforts to reduce carbon emissions in heavy industry. The ongoing investment in renewable energy and the preservation of integrated aluminium operations will not only bolster regional economic development but also help meet national environmental targets and foster long-term sustainability for Queensland’s workforce and economy.