Rio Tinto forgoes delivery of 8 million litres of diesel to grow WA stockpile

Mining giant Rio Tinto will forgo a delivery of eight million litres of diesel from its supplier Viva Energy which will instead be sold to the WA government for $2.25 per litre as the state grows its own fuel stockpile.

Premier Roger Cook said he received the unsolicited offer from Rio Tinto’s iron ore chief executive Matthew Holcz earlier this week.

The government will pay $18 million for the delivery, which will be stored in Kwinana and Esperance.

The fuel will be delivered by Viva Energy next month and will be aimed at replenishing supplies in farming and remote communities in the Wheatbelt, Great Southern and Goldfields regions.

The fuel comes on top of a government announcement last week that it had secured four million litres of fuel to be delivered to Wyndham next week, taking the state’s total diesel stockpile to 12 million litres.

“This means that we can direct fuel to where it is needed most, and we can get it there quickly and efficiently utilising established fuel supply routes,” Cook said.

Cook denied there were any strings attached to the offer from Rio Tinto.

“Not at all, other than the fact that we had to reach an agreement about the sale price, and...we’ll then hand that on as part of reintegrating that into the market,” he said.

Energy Minister Amber Jade Sanderson said the fuel would be sold at cost.

She said storing the fuel in Kwinana, Wyndham and Esperence meant the fuel could be deployed to maximum benefit.

“The Kwinana storage will be specifically to support the Wheatbelt, the Esperance storage will be specifically to support the Great Southern and Goldfields regions,” she said.

“It will be a lifeline for areas when there is times of acute need, such as our remote communities and our agricultural sector.”

Alinta has already provided 800,000 litres of diesel into the market while Atlas fuel has added five million litres.

The four million litres of diesel for Wyndham was purchased from BP via Cambridge Gulf.

Sanderson said she expected other businesses to follow Rio Tinto’s lead.

“I expect so, we have some fantastic industries in WA who are very used to supporting particularly regional areas,” she said.

“We’re certainly scoping storage opportunities throughout the state, and there will be further opportunities.”

Rio Tinto Iron Ore chief executive Matthew Holcz said the company was happy to do what it could to help.

“We’re glad we’re in a position to contribute to the state’s diesel supplies and we hope it goes some way to easing the pressure on communities and farmers at this challenging time,” he said.

Western Australia’s desire to establish a state fuel stockpile separate from the nationals stockpile, known as the mandatory stockholding obligation, has drawn criticism from Federal Opposition Leader Angus Taylor who last week said it demonstrated states didn’t trust the Albanese government’s management of the fuel crisis.

Cook rubbished Taylor’s claim and said his state was seeking to establish these stockpiles because it had unique energy requirements.

“We’re the largest jurisdiction, and so we’ve got a heavy reliance on diesel, in particular in relation to our transport-related industries,” he said.

“We’ve got our resources sector, which continues to be a huge consumer, in fact, BHP is the largest consumer of diesel in the country.

“We’ve got our small remote communities, all of which rely on diesel-power generation.

“We’ve got more remote communities than Northern Territory and Queensland combined.”