Rio Tinto signs new power deal for Australian aluminium

UK-Australian mining firm Rio Tinto has announced a second major power purchase agreement (PPA) for the supply of renewable electricity to its Gladstone aluminium operations in Australia's Queensland state.

Rio Tinto in the 25-year deal will buy 80pc of the output from renewable developer Windlab's planned 1.4GW Bungaban wind project, which is currently in an early development stage 290km southwest of Gladstone. Construction is expected to start in late 2025 depending on development and grid connection approvals. The wind farm could start generating electricity by 2029, Rio Tinto said on 21 February.

This is the second PPA signed for its Gladstone aluminium, following last month's 25-year deal with Danish renewable energy firm European Energy for the purchase of all the output from the 1.1GW Upper Calliope solar photovoltaic project, the largest solar farm planned in Australia.

Rio Tinto said the combined 2.2GW of renewable power under the two PPAs has the potential to cut its carbon dioxide (CO2) emissions by 5mn t/yr, helping a goal of halving its global scope 1 and 2 greenhouse gas emissions by 2030 from 2018 levels. Supplies in the Bungaban wind deal, the largest PPA signed in Australia, represent a reduction of around 3.2mn t/yr of CO2 emissions.

"If combined with more renewable power and suitable firming, transmission and industrial policy, the Bungaban and Upper Calliope PPAs could also provide the core of a solution to repower Rio Tinto's three Gladstone production assets," it said. The company needs around 4GW of solar and wind capacity, or the equivalent of over 1GW of base-load generation capacity, to power its Boyne aluminium smelter and the Yarwun and Queensland alumina refineries in Gladstone.

Rio Tinto reported 142 petajoules of global renewable energy use in 2022, with its global scope 1 and 2 emissions falling to 30.3mn t CO2 equivalent (CO2e) from 31mn t CO2e in 2021 and 33.7mn t CO2e in 2018. The aluminium business represented the highest volume in 2022 at 21.1mn t CO2e, with Australia overall at 18.2mn t CO2e of the total.

By Juan Weik