Rio Tinto Signs 20-Year Renewable Energy Deal for Gladstone Aluminium Operations

About Rio Tinto Limited

Rio Tinto Limited (ASX: RIO) is a leading global mining and metals company with operations in 35 countries. The company produces iron ore, copper, aluminium, and critical minerals essential for the global energy transition. Its segments include Iron Ore, Aluminium, Copper, and Minerals. In the Pilbara region of Western Australia, Rio Tinto operates an integrated network of 17 iron ore mines and four independent port terminals.

Renewable Energy Initiatives

In March 2025, Rio Tinto announced a 20-year agreement with Edify Energy to supply renewable energy to its Gladstone aluminium operations in Queensland. This partnership involves the construction of the Smoky Creek and Guthrie’s Gap solar power stations, expected to commence in late 2025 and conclude by 2028. The projects will provide 600MW of solar power and 600MW/2,400MWh of battery storage, covering approximately 80% of the Boyne smelter’s electricity needs and reducing direct emissions by 70%, equivalent to 5.6 million tons of carbon dioxide annually.

Financial Performance

In 2024, Rio Tinto reported a 15% increase in net profit to $11.55 billion, aided by asset sales and reduced impairment charges. However, underlying earnings declined by 7.6% to $10.87 billion, primarily due to weaker iron ore prices driven by reduced demand from China. Consequently, the annual dividend was reduced to $4.02 per share from $4.35 in 2023. Despite the dip in iron ore revenue, gains in copper, aluminium, and bauxite prices partially offset the decline. The company continues to focus on diversifying into minerals essential for the energy transition, such as copper and lithium.

Leadership Transition

CEO Jakob Stausholm has announced plans to step down by the end of 2025. The board has initiated a search for his successor, aiming to ensure a smooth transition and continued strategic focus. Stausholm’s tenure has been marked by efforts to enhance sustainability and diversify the company’s portfolio.

Lithium Expansion Efforts

Rio Tinto is in discussions with the Democratic Republic of Congo (DRC) to develop one of the world’s largest hard rock lithium deposits. These talks are in the early stages, and the outcome remains uncertain. The move aligns with Rio Tinto’s strategy to diversify into minerals critical for the global energy transition, given lithium’s essential role in battery production for electric vehicles and renewable energy storage.

Norway Wealth Fund Opposes Dual-Listing Review

Norges Bank Investment Management (NBIM), which manages Norway’s sovereign wealth fund and holds a 2.51% stake in Rio Tinto Plc, has declared its intention to vote against a shareholder resolution proposing a review of Rio Tinto’s dual-listing structure. The resolution, backed by activist fund Palliser Capital, is set for a vote at Rio Tinto’s annual general meeting on 3 April 2025. NBIM’s opposition adds weight to Rio’s stance against the proposed review, which the board argues is unnecessary following a prior internal assessment. The board maintains that unifying the dual-listed company (DLC) structure could be value-destructive, citing risks such as loss of franking credits and tax inefficiencies. Supporters of the resolution believe a unified listing could enhance corporate governance and shareholder value. The outcome of this vote could significantly influence Rio Tinto’s future governance direction.

Conclusion

Rio Tinto continues to navigate a dynamic landscape, balancing financial performance, leadership transitions, and strategic diversification into critical minerals. Its commitment to renewable energy and sustainability initiatives positions the company to meet evolving global demands. However, challenges such as fluctuating commodity prices, shareholder pressures, and operational transitions will require careful management to sustain growth and shareholder value.