News Room - Steel Industry

Posted on 01 Dec 2022

Rio Tinto to invest $3 billion/year in energy transition assets

Anglo-Australian miner Rio Tinto said Wednesday it plans to invest up to $3 billion per year in growth assets to meet demand from a decarbonising world. However, its own decarbonisation path looks somewhat sluggish, Kallanish notes.

Executives told investors at a seminar that the company will prioritise growth in materials needed for the transition, targeting a comprehensive green offer with technical support, and working to deepen partnerships with end-customers OEMs. The multicommodity, low-carbon, and critical minerals approach is aimed at supporting its customers in their decarbonisation journeys.

Rio Tinto is scaling up “nature-based solutions” close to its assets, “generating carbon credits and positive outcomes for people and nature,” the company says. It’s also increasing the use of renewables power in certain operations, but “fleet electrification will require time and technology breakthroughs,” it adds.

The miner sees electrification happening at scale between 2028 and 2045. From 2022 until 20235, Rio Tinto is betting on biodiesel and biofuels to curb emissions from its fleet, which includes drill, charge, dozer, loader, and truck. Around 2026, the company expects to see early deployment of battery electric solutions for charges, loaders, and trucks. Currently, the entire fleet runs on diesel.

Hydrogen, another decarbonising alternative, can be potentially used as a reductant for zero-carbon steelmaking, for ilmenite reduction and as fuel for calcining in its alumina refineries. However, Rio Tinto points out that hydrogen is “currently uneconomic and energy and capital intensive.” In addition, it cites the problem of leakage, with around 1% per day of hydrogen being lost when stored in liquid form.

“Global warming potential is 5-15% that of CO2 driving the production of hydrogen close to its point of use,” it adds.

The targeted growth investment up until 2025 include copper projects such as Oyu Tolgoi, Kennecott, Resolution, Wino, and Nuton, as well as the lithium Rincón project and other iron ore and aluminium projects. The aim is to have “growth options resilient to future scenarios, whilst maximising exposure to upside from the energy transition,” investors were told.

Management has outlined six large emission abatement programmes to help Rio Tinto to halve its Scope 1 &2 emissions by 2030, on the road to net-zero by 2050.

“Meeting the incremental demand of the energy transition and ensuring local supplies of critical materials globally deepens our relevance in the world and provides new opportunities. We are working hard to decarbonise our assets and products, as we invest to grow in materials needed for the energy transition,” adds ceo Jakob Stausholm.

Rio Tinto expects the energy transition to add up to 25% in new demand above traditional sources on a copper equivalent basis across the group’s key products by 2035. It also sees recycling accounting for 31-35% of copper total demand and around 15-25% of lithium, nickel, and cobalt.

Source:Kallanish