Rio Tinto (ASX:RIO) has welcomed the Australian Government’s aluminium production credit to help sustain and grow aluminium smelting in Australia.
The government is investing $2 billion in the nation’s aluminium industry, as part of its Future Made in Australia initiative. Under the investment, aluminium smelters switching to renewable energy by 2036 will receive federal funds for every clean and reliable aluminium made in Australia over a 10-year period.
Rio Tinto says the government’s move will significantly advance both regional communities and the nation’s manufacturing capabilities.
The production credit forms part of the Future Made in Australia plan, which puts Australia on a path to becoming a leader in green metals manufacturing, while supporting a continued strong economic future for communities that have powered the nation’s aluminium industry for generations.
Rio Tinto Australia CEO Kellie Parker says the Australian Government’s commitment shows strong confidence in domestic manufacturing and the nation’s position in the global economy.
“As traditional energy sources for heavy industry become increasingly uncompetitive, today’s announcement is a critical piece in helping future-proof the industry. Such support is crucial for sustaining and growing regional economies,” Parker says.
The credit aims to give local aluminium smelters the confidence to invest, securing Australian jobs and strengthening the nation’s world-class aluminium industry.
The support comes at a pivotal time for Australia’s aluminium sector, as major manufacturers and infrastructure developers worldwide increasingly seek supply of low-carbon material, driving growing demand for sustainably produced products.
“As global industrial customers and consumers increasingly focus on low-carbon products, this support signals Australia’s potential to be a major supplier of the aluminium needed for the global energy transition, creating a foundation for local businesses and manufacturing to thrive,” says Parker.
Rio Tinto’s partnership with the Queensland Government supports Boyne Smelters’ (BSL) transition to renewable energy, as well as Rio Tinto’s progress in securing renewable power to provide competitively priced electricity for its aluminium operations.
This includes signing Australia’s largest renewable power purchase agreement in early 2024 to supply its Gladstone aluminium operations, whereby Rio Tinto will purchase the majority of electricity from Windlab’s planned 1.4GW Bungaban wind energy project, and an earlier agreement with European Energy to drive development of the 1.1GW Upper Calliope solar farm. These projects will make Rio Tinto the biggest industrial buyer of renewable power in Australia.
Rio Tinto’s integrated aluminium production chain in Queensland employs over 4,500 people directly and its operations in Gladstone alone account for more than 3,000 jobs, with 1,000 of those at BSL.
Additionally, Rio Tinto’s bauxite operations in Weipa employ more than 1300 people, supplying raw materials to the Gladstone manufacturing facilities.
Rio Tinto is now a 51.55% owner of Tomago Aluminium Company and will be working with the New South Wales Government to help secure the future of that operation. Tomago, in the Hunter Valley, is Australia’s largest aluminium smelter, and directly supports more than 1,200 full-time jobs.
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