Rio Tinto (ASX:RIO) has finalised a $2 billion partnership with the Commonwealth and Queensland governments to guarantee the operational future of the Boyne aluminium smelter until at least 2040.
The decade-long investment, a cornerstone of the Federal Government's "Future Made in Australia" initiative, ensures the Gladstone-based facility remains cost-competitive as it transitions away from its current power contracts.
Under the terms of the agreement, the dual-level government funding will support the smelter’s evolution, effectively anchoring thousands of regional jobs and securing the long-term viability of Queensland’s heavy manufacturing sector.
The deal coincides with a shift in Rio Tinto's energy strategy, as the mining giant ramps up its transition toward a greener grid.
As part of the broader arrangement, Rio Tinto has committed to an offtake agreement for 40% of Lightsource bp's Lower Wonga solar and battery hybrid project.
The move brings the company’s total contracted renewable power in Queensland to over 2.8GW, marking a decisive pivot toward sustainable production.
Rio Tinto Aluminium & Lithium CEO Jérôme Pécresse emphasised that as fossil fuel costs continue to climb, this strategic investment—coupled with existing power purchase agreements—is designed to transform Boyne into one of the world's first aluminium smelters primarily underpinned by wind and solar energy.
The deal seeks to decarbonise one of the nation's most energy-intensive assets while maintaining its status as a global competitor in the metals market.