Queensland Government Offers Subsidies to Support Struggling Smelter During Transition to Net Zero

The Queensland government has partnered with mining giant Rio Tinto to support the transition of its Boyne aluminium smelter in the industrial city of Gladstone as it moves towards using renewable energy by 2029.

As part of its “Energy and Jobs Plan,” the government will provide economic support for this transition.

The cost to Queenslanders for this support has not been disclosed, but it is expected to come in the form of subsidised energy costs for the smelter, a major electricity user.

Rio Tinto depreciated the smelter’s value completely last year, citing high energy costs. In 2020, former CEO Jean-Sebastien Jacques cautioned that Australian smelters like Boyne were facing challenges due to high electricity costs and low aluminium prices.

This agreement aligns with the federal government’s backing for a decarbonised aluminium industry in the Future Made in Australia Plan.

In exchange, Rio Tinto will invest to maintain Boyne Smelter Limited’s (BSL) full operational capacity, ensuring the plant— with an annual production capacity exceeding 500,000 tonnes of aluminium and over 1,000 direct employees—will remain a significant contributor to the local, Queensland, and national economy.

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Rio Tinto holds a 73.5 percent stake in BSL after acquiring Mitsubishi Corporation’s 11.65 percent interest earlier this year.

The company will also enhance its coastal shipping capacity by adding a fifth domestically-crewed vessel to its existing fleet of four. These vessels transport bauxite from Rio Tinto’s Gove and Weipa mines to facilities in Gladstone.

Moreover, Rio Tinto has committed to further sustainable energy investments in Queensland, building upon its current involvement in Australia’s largest solar and wind projects throughout the state.

Solar Energy to Support the Plant in Future

Through a 25-year agreement with European Energy Australia, Rio Tinto will purchase all electricity generated from the proposed 1.1 GW1 Upper Calliope Solar Farm.

Queensland Premier Steven Miles emphasized that Rio Tinto must operate the smelter at full capacity until the end of 2040, continue with maintenance and capital expenditure, and meet employment obligations.

Rio Tinto’s current Chief Executive Australia, Kellie Parker, described the agreement as “one of the most significant partnerships in our extensive history of operations in the state.”

She added, “This lays the groundwork for a competitive, environmentally friendly BSL, sustaining jobs and reducing Australia’s carbon footprint. The partnership reinforces Australia’s position as a key global supplier of aluminium at a time when the metal is crucial for the green energy transition.”

“While this agreement is a crucial step, there is more work to be done. We will continue engaging with the federal government on supportive industry policies to preserve Australia’s green aluminium sector for the future.”