Australia unveils $1.4B support for Rio’s Boyne aluminum smelter

Australia on Wednesday unveiled A$2 billion ($1.40 billion) over 10 years to support mining major Rio Tinto’s Boyne Smelters, the country’s second-largest aluminum smelter, to stay open.

The investment, equally funded by the federal and Queensland state governments, will unlock almost A$7.5 billion in new investment in Queensland, with Rio Tinto underwriting investment in energy assets, Federal Industry Minister Tim Ayres said.

Rio Tinto said, in a separate announcement, that the initiative would help position the smelter to run on solar and wind power, as the Anglo-Australian miner looks to reduce emissions and maintain competitiveness amid rising fossil fuel costs.

The deal ensures Boyne Smelters Limited, in which Rio Tinto holds a majority stake, will continue aluminum production beyond the expiry of its existing power contract in 2029 and through to at least 2040.

Australia’s metals processing sector has been under pressure from high energy and labour costs, and governments announced financial support for several facilities last year.

Rio Tinto has also agreed to take 40% of output from Lightsource bp’s Lower Wonga solar and battery project, equivalent to 112 megawatts of solar capacity, taking its total contracted renewable power capacity in Queensland to more than 2.8 gigawatts.

($1 = 1.4296 Australian dollars)

(By Renju Jose and Roshan Thomas; Editing by Mark Porter and Alan Barona)