Rio Tinto to continue operating Boyne Island smelter until at least 2040 under new agreement

The Queensland government has agreed to partner with mining giant Rio Tinto (ASX: RIO) to ensure the long-term operation of the Boyne Island aluminium smelter near Gladstone.

The government has offered its growing renewable energy capacity to support Australia’s second-largest aluminium smelter, which has been operating since 1982 and specialises in manufacturing carbon anodes, aluminium production and casting molten metal into aluminium products for export.

A support package has been agreed upon, accessible by Rio Tinto from 2029, to ensure the smelter’s economic competitiveness as it shifts to cleaner and renewable energy sources.

Under the agreement, Rio Tinto will be required to operate the smelter at full capacity until the end of 2040.

Future ensured

Premier Steven Miles said that the agreement will help protect around 1,000 local jobs by ensuring the future of the smelter.

“I am partnering with industry to secure the jobs of working Queenslanders,” the premier 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 (BSL) because they support jobs and supply chains well beyond their own operations.”

“This will create new opportunities to attract investment and jobs in manufacturing, energy supply chain capabilities and advanced and value-added agriculture across the regions.”

The agreement is conditional upon the completion of Rio Tinto’s energy contracting activities, relevant joint venture approvals and government contributions to the ongoing viability of Boyne Smelter.

Rio Tinto agreed to acquire Mitsubishi Corporation’s 11.65% Boyne Smelters stake in early June.

Demand response

Rio Tinto has also committed to investing in demand response capabilities, with the smelter called on to lower its electricity demand at times of tight supply, reducing pressure on the national grid and wholesale energy prices.

Rio will also introduce an additional Australian-crewed vessel on its Cape York-to-Gladstone route.

Rio Tinto Australia chief executive Kellie Parker said the agreement represents one of the most significant partnerships in the company’s long history of operations in the state.

“It paves the way for a competitive, green-energy-powered BSL, supporting employment and lowering Australia’s carbon footprint.”

“The partnership will support Australia’s status as a leading global supplier of aluminium at a time when the world needs the metal for the green energy transition.”