Rio Tinto to Spend $7.5 B to Cut Carbon Emissions by 50% by 2030

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Rio Tinto, an Anglo-Australian multinational and the world’s second-largest metals and mining corporation, plans to spend $7.5 billion in direct capital expenditure to decarbonise its assets from 2022 to 2030, aiming to reduce carbon emissions by 50% by 2030.

The mining giant has outlined a long-term strategy for the decarbonisation of some of its operations in Australia by using wind and solar power.

Key highlights of its plan comprise the following points:

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• Rio Tinto is targeting a 50% reduction in scope 1&2 emissions by 2030 and a 15% reduction by 2025 from a 2018 baseline of 32.6Mt (CO2 equivalent – equity basis).
• ~$7.5 billion in direct capital expenditure decarbonising Rio Tinto’s assets from 2022 to 2030, with a focus on renewable power for iron ore in the Pilbara and for the Australian aluminium smelters, including $0.5 billion per year from 2022 to 2024.
• ~$200 million of incremental operating expenditure on building new capabilities, energy efficiency initiatives and R&D.
• Overall capital guidance of ~$7.5 billion in 2021 (unchanged), ~$8 billion in 2022 (previously ~$7.5 billion) and an ambition to spend between $9 billion and $10 billion per year in 2023 and 2024. This includes sustaining capital of ~$3.5 billion a year (previously $3.0-3.5 billion), of which $1.5 billion a year relates to Pilbara Iron Ore.

The deployment of the Rio Tinto Safe Production System is underway to ensure the Group regains its position as Best Operator, said the company.

Rio Tinto Chief Executive Jakob Stausholm said “Rio Tinto is taking action to strengthen our business and improve our performance by unleashing the full potential of our people and assets, working in partnership with a broad range of stakeholders.

“All our commodities are vital for the energy transition and continue to benefit from ongoing urbanisation. We have a clear pathway to decarbonise our business and are actively developing technologies that will enable our customers and our customers’ customers to decarbonise.

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“We are able to do this, while continuing to provide attractive returns to our shareholders in line with our policy, because we have a strong balance sheet and world-class assets that deliver strong free cash flows through the cycle.”

Iron ore:

• Medium-term Pilbara iron ore system capacity of between 345 million and 360 million tonnes per year (on a 100% basis).
• Decarbonisation of the Pilbara will be accelerated by targeting the rapid deployment of 1GW of wind and solar power. This would abate around 1 million tonnes of CO2, replace natural gas power for plant and infrastructure and support early electrification of mining equipment.
• Full electrification of our Pilbara system, including all trucks, mobile equipment and rail operations, will require further gigawatt-scale renewable deployment and advances in fleet technologies.
• Options to provide a greener steelmaking pathway for Pilbara iron ore are being investigated, including with biomass and hydrogen.

Aluminium:

• Rio Tinto Aluminium is the most profitable integrated aluminium business with an advantaged position in renewable energy.
• Options are progressing to switch the Boyne Island and Tomago smelters in Australia to renewable energy, which will require an estimated ~5GW (equity basis) of solar and wind power, along with a robust firming solution.
• A potential attractive structural change in the aluminium market driven by continued demand growth and supply-side constraints including ongoing pressures on fossil-fuel sourced energy.
• Development of ELYSISTM to eliminate carbon emissions from the smelting process is progressing, with commercial scale technology on track for 2024.
• 1 Mid-term defined as upon completion of the next tranche of new and replacement mines including Western Range,
• Bedded Hill Top and Hope Downs 2 and Brockman Syncline to reach and sustain capacity. These mines are expected to start commissioning from 2025. To reach and sustain the upper end of the range requires the next tranche of replacement mines due between 2025 and 2027.