Rio Tinto to cut production at Yarwun alumina refinery by 40%

MELBOURNE - Rio Tinto announced it will reduce production at its Yarwun Alumina Refinery in Gladstone, Australia by 40 percent starting October 2026, a move designed to extend the facility's operational life from 2031 to 2035. The mining giant, with a market capitalization of $121.39 billion, remains a prominent player in the global metals and mining industry according to InvestingPro data.

The decision comes as the refinery's tailings facility is expected to reach capacity by 2031 at current production rates. The curtailment will provide additional time to explore technical solutions that could further extend the site's operational lifespan.

The production scale-back will affect approximately 180 jobs at the facility, with Rio Tinto stating that redeployment planning across its Gladstone operations is underway. Annual alumina production will decrease by around 1.2 million tonnes from the current 3 million tonnes.

"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," said Armando Torres, Rio Tinto Aluminium Pacific Operations Managing Director, in a press release statement. Despite these challenges, InvestingPro analysis shows Rio Tinto maintains strong financial health with a 12% return on invested capital and robust cash flows that can sufficiently cover its interest payments.

The company indicated that the production reduction will not impact customer requirements or its other operations, with bauxite mines and aluminum smelters continuing to operate at full capacity.

Rio Tinto stated it remains committed to its Gladstone operations and will continue to focus on innovative tailings solutions, including neutralization and centrifuge-based dry tailings. The company also plans to continue prioritizing decarbonization technologies, such as replacing coal and gas in boilers with biofuels and advancing its Hydrogen Calcination Project.

The Yarwun refinery currently employs approximately 725 people and produces alumina used as feedstock for Rio Tinto aluminum smelters and international customers. With shares trading near their 52-week high at $70.49, Rio Tinto is currently considered slightly undervalued according to InvestingPro Fair Value estimates. Investors seeking deeper insights can access Rio Tinto's comprehensive Pro Research Report, one of 1,400+ detailed analyses available exclusively to subscribers.

In other recent news, Rio Tinto reported record production figures in its bauxite business and at the Oyu Tolgoi copper mine in Mongolia during the third quarter of 2025. The company's copper equivalent production increased by 9% year-over-year, with copper production on track to reach the higher end of its full-year guidance. In a strategic move to support its decarbonization goals, Rio Tinto secured a 15-year renewable energy agreement with TerraGen for 78.5 megawatts from the Monte Cristo I Windpower project in Texas. The company also announced a restructuring of its board, with Simon Henry stepping down and Sharon Thorne taking over as Chair of the Audit & Risk Committee.

Additionally, Rio Tinto and its partners Mitsui and Nippon Steel will invest $733 million in the West Angelas Sustaining Project in Western Australia to maintain an annual production capacity of 35 million tonnes of iron ore. Rio Tinto will contribute $389 million to this development. Investment bank JPMorgan has raised its price target for Rio Tinto to GBP61.70, maintaining an Overweight rating and placing the company on Positive Catalyst Watch ahead of its upcoming Capital Markets Day. These developments highlight Rio Tinto's ongoing efforts to expand its production capabilities and focus on sustainable energy solutions.

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