Rio Tinto Goes Its Own Way With Renewable Energy

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Australia hosts the largest and most successful mining companies in the world. So, when Rio Tinto and Fortescue Metals talk up renewables, it is big news. I have written about Twiggy Forrest’s ambitious plans for Fortescue to go “real zero” previously. You can read about it here. But we don’t always hear so much about other Aussie miners. Let’s have a look at Rio Tinto.

Rio Tinto is an Australian mining company with 150 years of mining and processing experience that operates in 35 countries, employing over 60,000 employees. Its portfolio includes: “iron ore, copper, aluminium and a range of other minerals and materials needed for people, communities and nations to grow and prosper, and for the world to cut carbon emissions to net zero. We continuously search for new projects that can support the energy transition, currently exploring for 7 commodities in 17 countries.” Rio even mines the “rare earths” that we are hearing so much about!

“Following the US’ implementation of tariffs and China’s export restriction as a response, Rio Tinto chief executive Jakob Stausholm commented that the company is considering the role of critical minerals in its future portfolio.”

They state that understanding their impact on the environment, they take seriously their role as stewards of natural ecosystems and the resources that underpin them. Rio Tinto’s goal is not as ambitious as that of Fortescue. Nevertheless, they aim to reduce emissions from their operations by 50% by 2030.

In the light of these ambitions, it was gratifying to hear that Rio has signed an agreement with Edify Energy to supply solar generation to Rio’s Gladstone aluminium smelter. Edify is building two solar farms for that purpose. They should come online in 2028. A great move, when you consider how much the political landscape of Queensland has changed. You can read about it here.

The new conservative state government has scrapped planned emissions targets, scrapped the government committees that inform them, and is trying to keep aging coal-fired power stations alive, despite the previous labour government already signing their death certificates.

Edify Energy’s new solar farms will be located in Central Queensland and together will provide 600 MWac of solar and 600MW/2,400MWh of battery storage.

Rio Tinto Chief Executive for Australia, Kellie Parker, said: “These agreements are integral to repowering our Gladstone aluminium operations with affordable, reliable and lower carbon energy for decades to come. For the first time, we have integrated crucial battery storage in our efforts to make the Boyne aluminium smelter globally cost-competitive, as traditional energy sources become more expensive.” All part of the transition to a low-carbon economy.

In 2024, Rio Tinto announced 2.2GW of renewable wind and solar PPAs for its Gladstone operations. Adding the generation from the two new solar farms will boost that to 2.7 GW of future wind and solar energy in Queensland and supply “80% of Boyne smelter’s annual average electricity demand, reducing the smelter’s scope 1 and 2 emissions by 70%, or 5.6Mt of carbon dioxide equivalent per year. This is the equivalent of removing about 2 million internal combustion engine cars from the road.”

The 600MW/2,400MWh battery system is expected to provide firming to repower the smelter and improve the stability and resilience of Queensland’s power network. “Rio Tinto’s integrated aluminium production chain in Queensland is a significant economic driver for the state and Australia, directly employing over 4500 people and supporting thousands more livelihoods. The company’s operations in Gladstone alone account for more than 3000 jobs, with 1000 of those at the Boyne smelter.
Rio Tinto’s three production assets in the Gladstone region are the Boyne aluminium smelter, the Yarwun alumina refinery and the Queensland alumina refinery.”

Rio Tinto’s move to renewables firmed with battery storage is a wise one, considering that the aging Gladstone power station is becoming more and more unreliable. It was built in 1976. According to analysis from Nexa Advisory, “Gladstone Power Station is increasingly unable to meet Queensland’s electricity needs, with outages, poor reliability and falling output threatening both household power bills and the state’s heavy industry hub. Since 2020, Gladstone’s average capacity factor has sunk below 45 per cent — well under the black-coal fleet average of around 55 per cent and is the worst performer across the whole National Electricity Market (NEM).”

“Across its six units, downtime has totalled an average of 14,800 hours a year — the equivalent of each unit being offline for more than a whole season (14 weeks annually). Unplanned outage hours have risen 65 per cent since 2020, even with increased planned maintenance. This unreliable performance directly impacts Queensland consumers. Gladstone’s persistent outages have contributed to price volatility and higher wholesale contract prices.”

“Rio Tinto have made this decision based on their economic assessment that renewable energy with storage is cheaper and more reliable than an ageing coal power station,” Queensland Conservation Council director Dave Copeman said in a statement.

“We are calling on the Crisafulli government to stop playing politics, and be upfront with the community by planning for the timely closure of the state’s other ageing coal power stations. The premier can’t keep throwing billions of taxpayer dollars at failing and polluting coal, and cross our fingers and hope it will keep the lights on.”

Unfortunately, the state government delivered an energy plan on October 10th that supported coal and gas-fired power. It looks like Rio Tinto can move to renewables but the politicians can’t. It is ironic that the arguments against aging coal-fired power plants are the same that used to be leveled at renewable energy — too expensive, too unreliable. The transition is inevitable; it would be good if it was well planned — not a shambles that leads to blackouts, rising prices, and economic ruin. This reminds me of the iconic Australian poem “Said Hanrahan.” Read and have a laugh!

Apparently, most of the infrastructure is already in place to enable the switch from coal to wind, solar, and storage. The problem is in the minds of conservative politicians.

It appears that Rio Tinto is taking not only an environmentally responsible action, but also an economically informed one. Shareholders should be pleased. The state government appears to be blinded by its fossil fuel ideology. Taxpayers will probably lose out if the government steps in with a bailout. Rio Tinto appears to have left the door open for this. It should be noted that the Gladstone power station is 42% owned by Rio Tinto.

In any case, inevitably, the future of Queensland, Gladstone, and the mining industry is bright and electric. Just a bit bumpy at the moment.