Mining giant handed $2 billion in taxpayer funds to save 3000 jobs

Resources giant Rio Tinto has secured a $2 billion taxpayer handout to keep Australia's second-largest aluminium smelter running in a bid to save 3000 jobs and secure local manufacturing.

Industry Minister Tim Ayres announced this morning that the federal and state governments will jointly fund the 10-year rescue package for the central Queensland's Boyne aluminium smelter.

In return, operator Rio Tinto will underwrite about $7.5 billion in new renewable energy and storage investment in the state, and the smelter will continue running until at least 2040.

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Its power contract was due to expire in 2029.

"With a considerable public investment, we are catalysing a fourfold private investment that will build out the renewable energy grid and keep thousands of good regional jobs in central Queensland," Ayres said.

"This is a joint, 50:50 investment with the Queensland government… (it) is a good day for Queensland jobs, (and) a good day for Australian industry."

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About 1000 people are employed at the Boyne plant, which according to the state and federal governments, supports a further 2000 jobs in Gladstone.

The bailout is the fifth such rescue package announced by the federal government since the start of last year for the metal processing industry, with many power-hungry plants struggling to remain viable in the face of surging electricity prices.

One of those was for the Tomago aluminium smelter – the largest in Australia, which uses about 12 per cent of NSW's energy – although the specific details of that deal are yet to be unveiled.

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The Boyne smelter uses roughly 10 per cent of Queensland's energy, but under today's deal it will transition to being powered by renewables.

"As fossil fuels become increasingly expensive, this investment… positions Boyne to be among the world's first aluminium smelters underpinned by solar and wind power," Rio Tinto aluminium and lithium chief executive Jerome Pecresse said.

"It also ensures heavy manufacturing like aluminium smelting can continue in Gladstone for the long term."

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The move is part of a wider push by the federal government to improve Australia's self-reliance in an increasingly unstable global environment.

"This is a good decision for Australian economic resilience at a time in our history when we cannot take our future for granted," Ayres said.

"We cannot be complacent, and this investment is about building our industrial capability and giving us a platform to extend that into the future."

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