Energy giants did not receive $450m in price control compensation: Australian PM

Rio Tinto will receive “nothing” of $450m (US$303m) in compensation to offset the impact of the coal price cap on Queensland’s Gladstone power plant, Prime Minister said I’m here.

The federal government is negotiating a coal price cap of $125 per tonne with Queensland and New South Wales in an effort to bring down the cost of electricity for homes and businesses.

The Queensland government has already issued formal instructions to state-owned power producers to bid for the national grid at a price consistent with the domestic coal price of $125 per tonne.

State and federal governments also agreed to split the bill to compensate for the impact of the cap on Rio Tinto’s Gladstone power plant.

Prime Minister Anthony Albanese said on Seven’s Sunrise show on Thursday that “some assistance would be provided in the case of Queensland.”

“We only have one power plant, Gladstone,[but]we expect it to be very different from the numbers we see in the newspapers.

“There will be some compensation.”

A 1680MW power plant in central Queensland normally produces power for Rio’s aluminum smelter at Gladstone, but an explosion in May 2021 destroyed one of its generating units. Later, it is sold to the Grid to make up for the shortfall left by Callide Power Station.

“The federal and Queensland governments will share the cost of reimbursing Gladstone Power Station 50/50 based on actual costs,” a government spokesman told AAP on Wednesday.

“As part of this partnership on energy security, Commonwealth will work with the Queensland Government on a series of initiatives to support the transition to clean energy.”

The state and federal governments are still negotiating the deal with Rio and stand ready to increase compensation if necessary, but officials say compensation will be reduced once Callide power plant returns to full operation. I expect that

Other private plants that sell to Intergen-owned Myrmelan’s national grid are not covered as they do not have to buy coal on the open market as they are fed from their own mines nearby.

The state government still owns most generators in Queensland, so it doesn’t have to pass laws to impose price caps like it does in NSW.


Australian Associated Press is an Australian news agency.