In 2018, Rio Tinto sold its coal mines under pressure from its activist shareholders to go “green”. It turned out to be a terrible financial decision given the coal price has been at record levels ever since.
Worse for Rio Tinto was that the price it paid for electricity to power its Boyne Island aluminium smelter, near Gladstone, was linked to the coal price. The more the coal price went up, the more Rio Tinto paid. And, aluminium smelters use a lot of power.
This was hurting Rio enough, and then Vladimir Putin decided to invade Ukraine. Coal prices exploded from around $180 per tonne to over $430 per tonne. Before its 2018 fire sale of coal mines this wouldn’t have hurt Rio too much. It would have paid more for electricity at the smelter but made money on selling coal. They had a natural hedge.
But a poor financial decision to sell their coal mines left Rio exposed to a higher coal price and put them in serious trouble. Lucky for them a gullible Federal Labor Government had just been elected and decided to cap coal prices for Rio at $125 per tonne. I have been asking the Government for years how much this cost us all but the Government refuses to tell us how much they paid Rio Tinto. It would most likely be in excess of $500 million though.
Just before the Ukraine war began, Rio Tinto held out hope that they would not need such subsidies in the future as they were “progressing to switch the Boyne Island and Tomago smelters in Australia to renewable energy.”
Earlier this year after signing a contract with a massive, proposed wind farm in Central Queensland, Rio Tinto’s Chief Executive, Jakob Stausholm, said that “we have a pathway to provide the competitive, firmed power our Gladstone plants need.”
At the time there was no mention that more government subsidies would be needed, just that the renewable energy was “competitive”. And, after all, we have been told for years that renewable energy is “the cheapest form of power”.
Yet despite all of these promises, a few weeks ago Rio Tinto announced that “the Queensland Government will support [Boyne Island smelter’s] financial viability from 2029 as the smelter transitions to renewable energy.”
Hang on a second! If renewable energy is so cheap, as we were promised, why does Rio Tinto, one of the biggest companies in Australia, need “support” from the rest of us to keep operating? Why do we have to suffer with roads full of potholes and hospitals bursting at the seams, while handing over billions in taxpayer dollars to help one of Australia’s biggest companies?
I have asked Rio Tinto how much they are getting but they have refused to answer. The Queensland Government is keeping the number secret too. The Labor party is using our money to prop up the pet projects of massive multinational companies who then use this taxpayer money to carpet our beautiful landscapes with hideous, bird-killing wind turbines and fields of glass mirrors that are ironically called solar “farms”.
We were promised renewable energy that was cheaper and better for our environment. Instead, we will get the exact opposite.
Rio Tinto uses around four million tonnes of coal a year to power its Boyne Island Smelter. Coal mining does disturb the environment. Around 1000 hectares is used to mine that four million tonnes of coal.
Rio has already announced that it will use its taxpayer support to install 204 wind turbines and two million solar panels in Central Queensland. That will destroy around 40,000 hectares of our pristine Central Queensland environment, taking an area 40 times that of the coal powered smelter we have had to date.
And that is just half the renewable energy Rio needs to replace coal. So the environmental impact of renewables will probably end up at 80 times that of coal.
Then we get charged for this extravagance to boot! The coal mines actually give the rest of us money through royalties. The wind and solar factories take our money off us through massive subsidies.
We need to end this green scam before it costs us billions more and destroys our environment in the process.
