Rio Tinto Ltd (ASX: RIO) shares are falling on Wednesday morning.
At the time of writing, the mining giant's shares are down 2.5% to $124.90.
Why are Rio Tinto shares falling today?
Investors have been selling the company's shares today after significant iron ore price weakness offset the release of an announcement ahead of its full-year results release tonight.
The benchmark iron ore price fell 5% overnight to US$120.85 a tonne.
This has overshadowed news that Rio Tinto has signed Australia's largest renewable power purchase agreement (PPA) to date to supply its Gladstone operations in Queensland.
According to the release, the 25-year agreement will see the company buy the majority of electricity from Windlab's planned 1.4GW Bungaban wind energy project.
Combined with last month's PPA for the Upper Calliope solar farm in Queensland, Rio Tinto will be the biggest industrial buyer of renewable power in Australia.
Rio Tinto will be buying 80% of all power generated from the Bungaban wind energy project over 25 years, with the remaining 20% of the project's generated electricity supplying Australia's National Electricity Market. The project is targeted to start in late 2025 and is expected to produce electricity by 2029.
Management notes that it is another major step in the work to repower the company's Gladstone production assets, the Boyne aluminium smelter, Yarwun alumina refinery, and Queensland Alumina refinery.
Rio Tinto's Chief Executive, Jakob Stausholm, was pleased with the agreement. He said:
This agreement with Windlab builds on our momentum in our work to repower our Gladstone operations and provide a sustainable future for heavy industry in Central Queensland. The task remains challenging, but we have a pathway to provide the competitive, firmed power our Gladstone plants need and we are continuing to work hard with all stakeholders, including the Queensland and Australian governments, on getting there.
Competitive capacity, firming, and transmission, are critical to developing a modern energy system that can ensure more large-scale renewables development in Queensland and help guarantee the future of Australian industry.
