Rio Tinto secures AUD2bn bailout for Boyne aluminium smelter

(Sharecast News) - Rio Tinto said on Wednesday that it has struck a "landmark partnership" with the Queensland Government and the Commonwealth Government to secure a long-term future for the Boyne aluminium smelter at Gladstone, which will now be kept going until at least 2040. The agreement will also ensure the smelter remains internationally cost-competitive beyond its current power contract, Rio said.

The Queensland and Commonwealth Governments will invest a combined AUD2 billion over 10 years to 2040, finalising the terms of a previously-announced partnership between Queensland and Rio Tinto, and forming part of the Federal Government's Future Made in Australia initiative.

Rio said the partnership ensures Boyne Smelters Limited - the owner of the smelter in which it has a majority stake - will continue aluminium production beyond the completion of its current power contract in 2029, through to at least 2040.

Rio Tinto Aluminium & Lithium chief executive Jerome Pecresse said: "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.

"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."

See latest RNS on Investegate