Rio Tinto Smelter to Run on Renewables by 2033

Rio Tinto has announced that Australia's largest aluminium smelter, located at Tomago near Newcastle, will operate entirely on renewable energy by 2033. This transition is facilitated by a significant $2.5 billion subsidy deal struck with the federal and New South Wales governments. The agreement aims to secure the smelter's future and prevent its potential closure, which had been a growing concern due to rising energy costs and the facility's reliance on coal-fired power.

The new power supply guarantee, negotiated with the federal government and the NSW government, will commence after the smelter's current electricity contract with AGL expires in December 2028. This guarantee is described as a 10-year, below-market power supply arrangement. The announcement was made by Australian Prime Minister Anthony Albanese and NSW Premier Chris Minns at the Tomago smelter site on Thursday. This initiative is a key component of broader efforts to decarbonise Australia's industrial sector and reduce greenhouse gas emissions.

The Tomago smelter is a significant industrial facility, employing approximately 1,100 people directly and supporting thousands more jobs indirectly through its supply chain and related industries. Its continued operation is considered vital for the regional economy of the Hunter Valley and for Australia's manufacturing capabilities. The deal addresses concerns that the smelter, a major consumer of electricity, might cease operations if it could not secure affordable and sustainable power sources. The transition to renewable energy is expected to significantly reduce the smelter's carbon footprint.

Rio Tinto, a global mining and metals company, has been under increasing pressure to align its operations with climate targets and investor expectations for environmental, social, and governance (ESG) performance. The company has committed to reducing its greenhouse gas emissions across its operations. This deal with the Australian governments represents a substantial investment in securing a long-term, low-carbon energy supply for one of its key assets. The specific renewable energy sources that will power the smelter have not yet been detailed, but the commitment is to a full transition by 2033. The $2.5 billion figure represents the total value of the government support package over the duration of the agreement, aimed at bridging the gap between existing energy costs and the future cost of renewable power.