Rio Tinto Signs Largest Renewable Power Purchase Agreement in Australia

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by | Feb 22, 2024

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Rio Tinto, one of the largest mining companies in the world, has signed the largest renewable power purchase agreement in Australia, agreeing to buy 80% of all power generated from Windlab’s planned 1.4 gigawatt Bungaban wind energy project.

The deal will supply Rio Tinto’s Gladstone operations in Queensland, with the agreement spanning 25 years. The operations include Boyne aluminum smelter, Yarwun alumina refinery, and Queensland Alumina refinery. The deal also makes Rio Tinto the biggest industrial buyer of renewable power in Australia.

Windlab’s project is currently in early development. The remaining 20% of renewable energy from the site will supply Australia’s National Electricity Market and deliver renewable energy to homes and businesses.

The total capacity of the wind farm, as well as Rio Tinto’s recent power purchase agreement with European Energy to drive development of the 1.1 GW Upper Calliope solar farm, will equal a combined 2.2 GW of renewable PPAs. Together they have the potential to reduce carbon emissions by 5 million tons and generate 10% of Queensland’s current energy demand.

The deal comes shortly after Rio Tinto teamed up with steelmaker BlueScope and BHP to develop a new pilot plant that aims to emit less greenhouse gas emissions with the first ironmaking electric smelting furnace pilot plant in Australia. 

Metal production and mining are carbon-intensive industries that could be considered hard to decarbonize. An emerging strategy to mitigate carbon emissions in the industry is renewable power purchase agreements, as well as carbon capture and storage. About 3% of Australia’s total emissions are generated by six alumina refineries, according to the Australian Renewable Energy Agency. While these technologies can reduce emissions, they don’t address the underlying emissions pollution.

“This agreement with Windlab builds on our momentum in our work to repower our Gladstone operations and provide a sustainable future for heavy industry in Central Queensland,” said Jakob Stausholm, Rio Tinto’s CEO. “The task remains challenging, but we have a pathway to provide the competitive, firmed power our Gladstone plants need and we are continuing to work hard with all stakeholders, including the Queensland and Australian governments, on getting there.”

Rio Tinto has a goal of halving its Scope 1 and 2 emissions this decade. 

“This agreement highlights the importance of large-scale renewable energy projects in shoring up Queensland’s powerhouse traditional industries, particularly minerals and advanced processing, which employ thousands of people in regional communities across the state and have a key role to play in our nation’s low-carbon future,” said Windlab CEO John Martin.

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