New deal makes Rio top renewables buyer
Rio Tinto boss Jakob Stausholm says the future of the Boyne aluminium smelter is now in the hands of the Queensland and federal governments, after the mining giant signed a wind deal with billionaire Andrew Forrest’s Windlab to partly power the operation.
Rio said on Wednesday it had agreed to buy the majority of the electricity from Windlab’s planned 1.4 gigawatt Bungaban wind energy project.
The agreement with Windlab – controlled by Andrew and Nicola Forrest’s Tattarang group, with Federation Asset Management as a minority shareholder, follows the company’s deal with European Energy Australia to take the entire supply from the proposed 1.1GW Upper Calliope solar farm to power the company’s smelter in Gladstone. Combined, the two agreements make Rio Australia’s biggest industrial buyer of renewable energy, it says.
But with more than 4GW of firmed renewable energy needed to supply Boyne’s 1GW annual power requirements, Mr Stausholm said the smelter’s future now rested on discussions with the state and federal governments over firming options for the smelter. “So we now have signed up to the two biggest (renewable energy agreements) and we only still have half of the capacity required. But the issue is right now, we cannot do much more before we have a solution with the Queensland Government and the Commonwealth in terms of a firming solution because ultimately we can’t run a smelter based on only solar and wind,” he said. “We have very good conversations with both the federal government and the Queensland government. But obviously, now we start getting very excited about getting to conclusions, as we have now committed a couple of billion dollars here.”
Rio’s existing power contracts run out in 2029, with construction work at Bungaben due to begin in 2025 and power delivery expected around the time Rio’s existing power contracts end.
Mr Stausholm said Rio accepted that it was taking some risk around the on-time completion of the renewable energy projects, but the company was comfortable with its decision, given the need to decarbonise its Australian smelters.
“You don’t have 100 per cent guarantees and there can be delays. We think that these projects are very well mature, and we feel comfortable about that,” he said.
“But one of the reasons I also feel comfortable is that I can really feel that these projects are so much in the nation’s – and particularly Queensland’s – interests.”
Windlab chief executive John Martin said the agreement with Rio was a major milestone in underpinning the Bungaben project.
“The project can be responsibly developed, grid connected and producing enough energy to power the equivalent of 740,000 Queensland homes by 2029, while eliminating about 4 million tonnes of carbon from the state’s generation profile every year,” he said in a statement.
Rio said it was still looking for renewable options to help power its alumina refineries.