Rio has been searching for renewable energy in central Queensland for more than a year to power its assets and as yet has yet to make any public headway. Aluminium is highly energy intensive.

The Gladstone operations also account for more than half of the company’s scope one and scope two emissions in Australia and chief financial officer Peter Cunningham said the decision also reflected the difficult market conditions those assets faced.

Allayaing fears about the future of Gladstone, Cunningham said they remained a key part of the company’s integrated aluminium operations.

But the decision to write off the total value of Yarwun is on the back of the Federal Government’s safeguard mechanism legislation which forces big emitters to buy carbon credits to offset their emissions.

“We recognised impairment charges of $US800 million ($1.58 billion after tax) in 2023 first half, mainly related to our alumina refineries in Queensland, triggered by the challenging market conditions facing these assets, together with our improved understanding of the capital requirements for decarbonisation and the recently legislated cost escalation for carbon emissions,’’ the company said.

Across all its Australian aluminium projects the company has recognised a pre-tax impairment of $US1.175 billion (post-tax $US828 million).

“This represents a full impairment of the property, plant and equipment at Yarwun alumina refinery and an impairment of $US227 million for the property, plant and equipment of Queensland Alumina.

“We are committed to the decarbonisation of our assets to reduce scope one and scope two emissions by 50 per cent by 2030 and to net zero emissions by 2050 relative to out 2018 baseline.”

Rio said it was likely further action would be necessary to align with the goals of the Paris agreement to limit temperature rises to 1.5 degrees.

While the company’s call in June last year for renewable energy producers to come up with projects to feed its Gladstone assets had not yet delivered anything it could announce, Rio has been moving into other areas.

Earlier this month the company said it would build a hydrogen plant in Gladstone in a joint venture with Sumitomo.

The hydrogen plant would cut emissions by 3000 tonnes a year.

The big write downs at Gladstone came as the mining giant produced a half year net profit of $US5.1 billion from which it would pay a $US1.77 a share dividend.