A view shows the Rio Tinto logo in Perth, Australia, April 19, 2025.
Rio announced the decision after concluding that constructing a second waste facility at Yarwun would require significant investment that is not currently feasible. The company said that extensive evaluations had been carried out but the required capital commitment could not be supported under present market conditions.
The reduction in output comes at a time when Rio Tinto’s aluminium operations in Australia and New Zealand are experiencing cost pressures. Prices for alumina, a key input for aluminium production, have fallen to two-year lows, affecting profit margins already influenced by electricity and labour expenses. The development also follows the restructuring initiated in August by new CEO Simon Trott, who aims to concentrate on the company’s most profitable assets.
Armando Torres, Rio Tinto Aluminium Pacific Operations Managing Director, said: “While we have extensively explored options to develop a second tailings facility for Yarwun over a number of years, the scale of investment required is substantial and not currently economically viable.”
Rio’s Pacific aluminium portfolio includes two bauxite mines, two alumina refineries, and two aluminium smelters in Australia, as well as one smelter in New Zealand. The company also holds a majority stake in the independently operated Tomago smelter, which is currently under review due to electricity costs.
RBC analyst Kaan Peker in Sydney said: “The broader thematic is that Australian (metals processing) is slowly being removed due to costs of production, energy prices, labour and capital intensity given low alumina prices.” He added that under these conditions, it would be difficult for Rio Tinto’s management to support investment in a new waste facility that could require hundreds of millions of dollars. The planned scale-back is expected to reduce about 3% of alumina supply in the ex-China market.
Rio Tinto said the production cut will decrease annual alumina output by around 1.2 million metric tons, while customer requirements will remain unaffected. The company reported 7.3 million tons of alumina output in 2024. Approximately 180 roles will be reduced from Yarwun’s workforce of about 725. Rio’s bauxite mines and aluminium smelters will continue to operate at full capacity.
The announcement comes as several smelters in Australia, including Glencore’s Mount Isa copper smelter in Queensland and Trafigura’s Port Pirie lead and zinc smelter in South Australia, have received government support to continue operations. Local media have also noted ongoing discussions regarding the future of Rio Tinto’s Bell Bay aluminium smelter in Tasmania, which recently secured a 12-month extension of its power contract with Hydro Tasmania.
