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.
