Rio Tinto will significantly reduce production at its Yarwun alumina refinery in Queensland by 40 per cent from October 2026. The move is expected to stretch the refinery’s life to 2035 and give the company more time to look at ways to modernise the site and possibly extend its life even further.
The company chose not to expand because it would be far too expensive right now. By reducing output, the refinery’s current waste areas — which would have filled up by 2031 — will last longer, giving Rio Tinto an extra four years to find long-term solutions.
The cutback comes at a time when Australia’s metals processing sector is under pressure from high power and labour costs, weighing on margins and discouraging major capital spending. At the same time, Rio Tinto is managing through alumina prices that have fallen to their lowest levels in two years, adding to the financial challenge of expanding waste infrastructure.
Pacific Operations Managing Director Armando Torres 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.”
The decision closely follows new CEO Simon Trott’s restructuring efforts, which began in August and are designed to concentrate on Rio Tinto’s most profitable operations. Yarwun is within the company’s Pacific aluminium portfolio, which includes two bauxite mines, two alumina refineries, three smelters across Australia and New Zealand, and a majority stake in the Tomago smelter — currently under review due to rising power costs.
Analysts say the latest move reflects deeper structural challenges. RBC’s Kaan Peker noted that high domestic energy and labour costs are reducing Australia’s competitiveness, adding that the cutback could remove roughly 3 per cent of ex-China alumina supply. He also said a second waste facility would likely have required several hundred million dollars in investment.
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The production reduction may provide some support to alumina prices, which have been softened by an increase in lower-cost output from Indonesia. On the bauxite side, Rio Tinto will need to decide whether to sell surplus ore to the market or slow mining rates at Weipa, which supplies Yarwun.
Rio Tinto said the scale-back will lower annual alumina output by around 1.2 million tonnes, though customer deliveries will not be affected. The company produced 7.3 million tonnes of alumina in 2024. The changes will also reduce the Yarwun workforce, with about 180 roles impacted out of roughly 725 positions. Its bauxite mines and aluminium smelters will continue operating at full capacity.
The announcement lands amid broader uncertainty across Australia’s smelting industry. Facilities such as Glencore’s Mount Isa copper smelter in Queensland and Trafigura’s Port Pirie smelter in South Australia have required government support to continue running. Meanwhile, Rio Tinto’s Bell Bay aluminium smelter in Tasmania has secured only a 12-month extension of its power contract pending negotiations on a longer-term deal.
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