Rio Tinto agrees state support for one of Australia’s largest smelters as Queensland ramps up renewables

Rio Tinto

OPERATION of the Boyne aluminium smelter in Queensland could be protected until at least 2040 under a support package negotiated between operator Rio Tinto and the state government.

The smelting process involves electrolysis so requires huge amounts of electricity. The smelter will be able to access the support package from 2029 as it shifts to using renewables as a source of power.

Details of how the Queensland government is funding the support package or how much it is worth have not been disclosed. The Australian is reporting that taxpayers could fund the package by subsidising the operation’s renewable energy costs.

The Boyne smelter is Australia’s second largest aluminium smelter. The facility is operated by Boyne Smelters, a joint venture between Rio Tinto and minority partners YKK Aluminium, UACJ Australia, and Southern Cross Aluminium. The smelter has an annual production capacity of 500,000 t and directly employs 1,000 people. It uses the Hall-Héroult process which involves dissolving alumina in a bath of molten cryolite and then passing electricity through it to split the alumina into aluminium and oxygen at around 950°C.

Operations on site include the manufacturing of carbon anodes, aluminium production, and casting of molten metal into aluminium products for export.

Under the terms of the deal, Rio Tinto will be required to operate the smelter at full capacity until the end of 2040, commit to ongoing maintenance capital expenditure and meet employment requirements. To help balance the power grid as more intermittent renewable supplies are brought online, Rio Tinto has agreed to develop the capabilities to dial down the smelter’s power consumption during times of peak demand. Queensland currently generates around 27% of its energy supply from renewable sources and has targets to lift this to 50% by 2030, 70% by 2032 and 80% by 2035.

Rio Tinto has also agreed to invest in more renewables and add a fifth ship to its fleet of vessels that transport bauxite – the aluminium feedstock for the smelter – from its Gove and Weipa mines.

Queensland premier Steven Miles said: “We know that Central Queensland is key to the state’s economy, which is why we are acting to protect anchor manufacturers like Boyne Smelters because they support jobs and supply chains well beyond their own operations.”

Rio Tinto says there are several further steps required before the support agreement is finalised including approval by joint venture partners and completion of energy contracts.

Kellie Parker, CEO of Rio Tinto Australia, said: “While this is a critical part of the puzzle, we have more to do. We will continue to engage with the Federal Government on supportive industry policy to help sustain Australia’s green aluminium sector for the future."