Rio Tinto, the Queensland government and the Australian federal government have announced a A$2-billion partnership to secure the long-term future of the Boyne aluminium smelter in Gladstone, while underpinning a major shift to renewable energy.

The agreement, unveiled on Wednesday, will see the Queensland and Commonwealth governments each invest A$1-billion over ten years to 2040, supporting the smelter’s transition to competitive long-term power and ensuring operations continue beyond the expiry of its current power contract in 2029.

The deal forms part of the federal government’s Future Made in Australia initiative and is expected to unlock about A$7.5-billion in private investment, with Rio Tinto underwriting new renewable-energy generation and storage capacity in the state.

Rio Tinto Aluminium and Lithium CEO Jérôme Pécresse said the agreement would secure the competitiveness of the smelter while supporting decarbonisation.

“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,” he said.

“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.”

The Boyne smelter, operated by Boyne Smelters Limited, is Australia’s second-largest aluminium smelter and forms part of a fully integrated aluminium value chain in Queensland, spanning bauxite mining, alumina refining and aluminium production.

The operation supports about 1 000 direct jobs and a further 2 000 indirect roles in Gladstone, with Rio Tinto’s broader Queensland aluminium operations employing more than 4 500 people.

Federal Industry and Innovation Minister Tim Ayres said the investment demonstrated how public funding could catalyse large-scale private investment.

“With a considerable public investment, we are catalysing a fourfold private investment that will build out the renewable-energy grid and keep thousands of good regional jobs in Central Queensland,” he said.

Queensland Minister for Natural Resources and Mines Dale Last added that the partnership would strengthen sovereign manufacturing capability amid global uncertainty.

“At a time when supply chain disruptions are being felt across the globe, this investment is needed now more than ever to safeguard Queensland’s sovereign manufacturing capabilities, and to build national resilience and international competitiveness,” he said.

The agreement builds on Rio Tinto’s existing renewable-energy strategy in Queensland, where the company has already contracted more than 2.8 GW of renewable power and over 600 MW of storage capacity since early 2024.

As part of the latest deal, Rio Tinto will also offtake 40% of the Lower Wonga solar and battery project, adding further capacity to support the smelter’s transition to cleaner energy.