The Rio Tinto Ltd (ASX: RIO) share price is up 1% after announcing a multi-billion dollar deal for green energy at its aluminium smelter.
Rio Tinto is one of the world’s largest commodity businesses – the miner produces iron ore, copper, aluminium, bauxite, lithium and more.
Green energy for Gladstone aluminium smelter
The Boyne smelter is Australia’s second-largest aluminium smelter, located at Boyne Island in central Queensland. Rio Tinto owns 73.5% of the smelter business.
Rio Tinto, the Queensland Government and the Commonwealth Government have agreed a partnership to secure a long-term future for the Boyne aluminium smelter at Gladstone and ensures it remains internationally cost-competitive beyond the current power contract.
The Queensland and Commonwealth Governments will invest a combined A$2 billion over 10 years to 2040.
Rio Tinto said that the agreement supports a long-term future for aluminium smelting in Queensland, building on power purchase agreements, signed by Rio Tinto, in recent years to underwrite A$7.5 billion in new renewable energy and storage in the state.
Rio Tinto has agreed to offtake 40% of Lightsource bp’s Lower Wonga solar and battery hybrid project near Gympie, equivalent to 112MWac of solar farm capacity (after inverter losses) and three hours duration of associated battery storage.
Management commentary
The Rio Tinto aluminium and lithium boss Jerome Pecresse said:
This transformative partnership with the Queensland and Australian governments will ensure Boyne Smelter remains internationally competitive, strengthens the Australian aluminium sector for the future and supports the transformation and decarbonisation of the Queensland energy system.
As fossil fuels become increasingly expensive, this investment, combined with the power purchase agreements we have already signed, positions Boyne to be among the world’s first aluminium smelters underpinned by solar and wind power.
It also ensures heavy manufacturing like aluminium smelting can continue in Gladstone for the long term, and preserves one of the few fully integrated aluminium value chains in the world – from bauxite mining to alumina refining to aluminium smelting all in Queensland – as demand for aluminium continues to grow with the energy transition.
Final thoughts on the Rio Tinto share price
I think Rio Tinto is one of the leading ASX mining shares that Australians can own with its diversified portfolio, focused expansion on copper and the way it’s investing in other potential growth areas like litihum.
It’s good to see that the smelter’s future has been secured with green power, which ensures Australian manufacturing, more usage of renewable energy and protects jobs. The last few weeks has shown the importance of having domestic production of commodities and power.
Interestingly, the Rio Tinto share price down 12% since 2 March 2026, though it’s still up 25% in the past year. This doesn’t seem like a great time to buy considering the strength of commodity prices – I believe it’s better to invest when prices are lower.
