Here's why Rio Tinto's greener AL future seems to be slipping away

Rio Tinto has been committing towards a greener aluminium future in the past. Au contraire, the present brings a different reality where their dreams and goals are farfetched as their major wind project, an alternative to coal consumption for energy, seems to be slipping away. The recently re-elected Queensland LNP government has spurned the mining giant’s 1.4-gigawatt Bungaban wind farm, among other larger energy production targets.

The state has the lowest percentage of renewable energy among all in Australia. Even if Labor’s target of 80 per cent renewable energy by 2030 had been implemented, the situation would not have changed significantly. However, the LNP’s intervention is likely to make the state even more of a laggard in this regard.

It is this daunting prospect – and its potential impact on some of the state’s biggest industries – that may have prompted Rio Tinto CEO Jakob Stausholm to make a post on LinkedIn late last week that sought to address the issue. “The world is growing, so we need to make sure it has enough energy,” Stausholm wrote.

He has also shared, “The reality is that no one is prepared to cut down on their energy usage, and you are going to see more renewables enter the global mix. Speaking of our own energy transition, cutting carbon emissions is about future-proofing the company; our investment in renewables makes economic sense. I think greater competition in this space will soon push the capital costs down for everyone.”

Stausholm’s comments are consistent with others, including Australia’s chief scientist, the head of US energy giant NextEra, and Andrew Forrest, whose renewable energy offshoot Windlab is the owner of the Bungaban project, and who argues that the world needs to transition even quicker and reach “real zero” by 2040.

The company’s decision to invest significantly in wind and solar projects aims to enhance its energy independence and reduce reliance on traditional fossil fuels. However, with key projects currently stalled, the potential consequences for Rio Tinto’s operations in Queensland are serious. This jeopardises not only their aluminium and alumina operations but also the broader ambitions of the Australian industry to embrace a clean energy future.

As the landscape evolves, one thing becomes evident: the urgency for accessible renewable energy is critical. The future of Rio Tinto, and indeed Australia’s energy transition, depends on overcoming these significant obstacles.