Rio Tinto will get "nothing like" $450 million in compensation to offset the impact of a coal price cap on its Gladstone Power Station in Queensland, the prime minister says.
The federal government is negotiating coal price caps of $125 a tonne with Queensland and NSW, in a bid to put drive down household and business electricity bills.
The Queensland government has already issued a formal direction to state-owned generators to bid into the national grid at a price consistent with a domestic coal price of $125 a tonne.
The state and federal governments have also agreed to split the bill to compensate Rio Tinto for the impact of the cap on its Gladstone Power Plant, one of only two wholly private generators selling to the grid in Queensland.
"There will be some support offered in Queensland's case," Anthony Albanese told Seven's Sunrise program on Thursday.
"There is only one power station, Gladstone, (but) we expect it will be nothing like the sort of figures that we have seen in the newspaper.
"There will be some level of compensation."
The 1680MW plant in central Queensland usually generates electricity for Rio's aluminium smelter in Gladstone, but it has been selling to the grid to fill a shortfall left by the Callide Power Station after one of its generation units was destroyed in a May 2021 explosion.
"The Commonwealth and Queensland governments will share 50-50 the costs of the rebate to the Gladstone Power Station to be based on actual costs," a government spokesman told AAP on Wednesday.
"As part of this partnership on energy security, the Commonwealth will work with the Queensland government on a package of commitments to support the clean energy transition."
The state and federal governments are still in talks with Rio over the deal and are prepared to lift the compensation amount if necessary, but officials expect it to be lower once Callide Power Station returns to full capacity.
The other private plant selling to the national grid at Millmerran, owned by Intergen, won't be compensated as it's supplied by its own mine nearby so it doesn't need to buy coal on the open market.
The state government doesn't need to pass laws to impose price caps like NSW as it still owns most of the generators in Queensland.
