Rio Tinto announced a 40% reduction in output at its Yarwun alumina refinery, scheduled to take effect in October 2026, to extend the plant’s life to 2035 and create a window for future upgrades.
The cut will lower annual alumina production by about 1.2 million tonnes, from the current 3 million tonnes, while keeping overall aluminium smelting capacity and customer commitments unchanged. The decision also defers the capital‑intensive investment in a second tailings facility, which Rio Tinto has deemed economically unviable at present.
Tailings storage at Yarwun is projected to reach capacity by 2031, prompting the production reduction to manage waste and avoid regulatory or environmental constraints. The move is expected to affect roughly 180 jobs out of the refinery’s 725 employees, but the company says it will maintain the refinery’s contribution to its aluminium business and preserve cash flow.
Rio Tinto’s strategy aligns with broader restructuring under CEO Simon Trott, which focuses on profitable operations and cost discipline. By cutting output, the company gains time to explore long‑term solutions for waste management, including decarbonization initiatives such as biofuels and a hydrogen calcination project, while keeping the refinery operational until 2035.
The production cut is driven primarily by infrastructure constraints rather than market demand. High power and labor costs in Australia, coupled with falling alumina prices, have pressured margins, but the decision is aimed at extending the asset’s life and positioning it for future modernization rather than responding to a downturn in demand.
Management emphasized that the reduction will not affect smelter operations or external customer supply, underscoring Rio Tinto’s commitment to maintaining service levels while managing capital expenditures prudently.
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