Rio Tinto [RIO:US], the world’s second-largest mining company, has inked a 25-year power purchase agreement (PPA) with European Energy Australia to buy electricity from a planned massive solar farm in Australia’s Queensland, as reported by Reuters on January 24. The project, known as the Upper Calliope solar farm, is expected to start construction in 2025 or 2026 and be completed within two years. With a planned power generation capacity of 1.1 gigawatts (GW), the project would be Australia’s largest solar farm when completed. Under the agreement, Rio Tinto will purchase all electricity for 25 years generated by the Upper Calliope solar farm to power its energy-intensive aluminum operations at Gladstone, Queensland.

Aluminum production is Rio Tinto’s most polluting business segment. In 2022, the company’s aluminum operations generated 21.1m tons of carbon emissions, accounting for around two-thirds of its reported direct and indirect emissions. By switching to solar power at its alumina refinery at Gladstone, Rio Tinto expects to lower its carbon footprint by 1.8m tons a year. The move forms part of the mining giant’s USD7.5bn plan to halve its operational carbon emissions (Scope 1 and Scope 2) by 2030 from 2018 levels. To achieve the target, the company vowed to increase its power from renewables, boost research and development spending on decarbonization pathways, and double spending on growth in minerals critical to the energy transition to around USD3bn a year from 2023.

Sources:

https://www.reuters.com/business/energy/rio-tinto-provide-renewable-power-gladstone-ops-under-new-solar-power-deal-2024-01-23/

https://www.riotinto.com/en/news/releases/2024/rio-tinto-to-drive-development-of-australias-largest-solar-farm-at-gladstone

https://www.bloomberg.com/news/articles/2024-01-23/rio-tinto-to-tap-giant-australia-solar-project-to-power-aluminum?srnd=green

https://www.reuters.com/business/energy/rio-tinto-aims-halve-carbon-emissions-by-2030-2021-10-20/