Australian Prime Minister Scott Morrison, pictured with member for Flynn Ken O'Dowd met with workers at Boyne Smelters Limited during his visit to Gladstone as part of his state-wide tour up the Queensland Coast on November 7, 2018.
Australian Prime Minister Scott Morrison, pictured with member for Flynn Ken O'Dowd met with workers at Boyne Smelters Limited during his visit to Gladstone as part of his state-wide tour up the Queensland Coast on November 7, 2018. Matt Taylor GLA071118MORR

Rio's struggle for long-term energy security for BSL

RIO Tinto's chief executive has called on the Federal Government for an energy policy to ensure the long-term future of its smelters, including Boyne Smelters Limited.

Chief executive Jean-Sebastien Jacques said the company was in talks with state and federal governments, and utility providers over a solution for rising energy costs at its aluminium smelters, but said operations could suffer if a solution was not found.

Mr Jacques told The Australian high energy costs were rendering them uncompetitive in a tough market for the commodity.

"At this point in time it is a very, very challenging situation," he said.

In 2015 Boyne Smelters Limited cut production by 15 per cent and made about 100 workers redundant after it could not reach a deal for 150MW of power.

A Rio Tinto spokesperson told The Observer the company was committed to running a viable, long-term, sustainable operation at Boyne Smelters.

"And to do that we need affordable energy prices if we are to compete in a global market," they said.

"We remain in active discussions with relevant stakeholders to find a solution that may include renewable energy in conjunction with coal-fired generation to provide the internationally competitive firm block of power needed for BSL."

Rio Tinto's half-year report showed the aluminium business's gross revenue was $5.1 million, compared to $6.14 million the year prior, and said the aluminium business was stable operationally, but suffered from price declines.