Last week, leading global metals and minerals producer Rio Tinto announced a 2050 zero-emissions goal for its operations. Critics quickly found fault with the plan, which is understandable considering the company’s past. But for its part, Rio Tinto says it's looking to the future — and its 2050 goals may put renewed pressure on government leaders who remain reluctant to articulate a forceful national climate policy.
Rio Tinto is an Anglo-Australian multinational. Soon after its founding in 1873, the newly formed company purchased an ancient copper mine in southern Spain and transformed it into the top copper producer globally. The mining giant diversified over the years to cover coal and uranium, as well as other metals and minerals.
Anecdotal evidence suggests Rio Tinto may have seen the climate change writing on the wall before many of its peers. In 2009, it sold one of its major coal holdings — Jacobs Ranch in Wyoming — to U.S. producer Arch Coal. At the time, Jabobs Ranch was the fourth largest coal mine in the U.S.
Whether the motivation was climate risk mitigation or looming competition from low-cost natural gas, Rio Tinto continued selling off its coal assets in the years since.
Arch Coal went bankrupt in 2016. At least 11 other U.S. coal producers filed for bankruptcy in the years after, as demand for coal swung downward. Although Arch Coal emerged from chapter 11 in 2018, its future is far from certain as the pace of climate action accelerates.
Meanwhile, Rio Tinto’s coal-shedding activity provided it with a platform to support the 2015 Paris agreement on climate change. In 2018, the company sold the last of its coal assets and pivoted to a new sustainability plan.
In contrast to fossil fuel producers, Rio Tinto’s history of diversification provides it with ample opportunity to position itself as a key player in the renewable energy transition. And the company is not letting that opportunity slide by.
On its website, Rio Tinto is quick to emphasize that it produces copper and iron ore for steelmaking, two materials essential for making wind turbines, solar arrays and electric vehicle batteries, among other clean technologies.
The company’s aluminum operations also provide it with avenues into fuel efficiency and other clean tech areas, as the lightweight metal makes its way into auto manufacturing and other major commodities.
Rio Tinto described four climate action areas under its newly announced 2050 zero-emissions plan. Continuing to produce raw materials for the low-carbon economy of the future tops the list, specifically aluminum, copper and high-grade iron ore.
That’s not particularly challenging since Rio Tinto already has a head start. However, it certainly helps from a marketing angle, and the emphasis on the low-carbon economy may provide Rio Tinto with a pathway for winding down parts of its business that support fossil fuel production and use.
The company also has a head start in its second action area of focus, which involves reducing the carbon footprint of its mining and smelting operations. Thanks largely to hydropower, it already uses 76 percent renewables to power the operations it manages, particularly in regards to the energy the company requires for aluminum smelting.
Rio Tinto is also a member of the ELYSIS partnership, which launched in 2018 to develop new technology for zero-emission aluminum smelting. And last month, the company also announced its first major solar investment, a massive $98 million solar-plus-storage project for the new Koodaideri iron ore mine in Western Australia.
Though critics of Rio Tinto's sustainability plan have pointed out that it falls short in the area of value chain decarbonization, a third part of the action plan — cleaning up the carbon footprint of the steel industry — does take a step in that direction. Work in that area began last year in partnership with China Baowu Steel Group and Tsinghua University.
The company's fourth and final focus area involves planning for resiliency and climate impacts. That’s interesting from a climate advocacy perspective, because it provides the company with leverage to lobby for change as its facilities — and its jobs — are threatened by rising seas, extreme weather and other impacts.
The new plan also appears to put Rio Tinto’s industry partners on notice that the company will disengage itself from relationships that are inconsistent with its position on the Paris agreement:
“On the complex issue of climate change, we believe that significant progress towards a solution will only occur where there is broad engagement," the company's new climate plan reads. "We advocate for policy consistent with our public climate change position and the principles contained within it.”
To motivate executives to meet a near-term 2030 emissions goal, the plan also deploys a strategy that links executive pay to progress, similar to that announced by Royal Dutch Shell in 2018.
If the intent is to encourage executives to consider their own pocketbooks and lobby more aggressively against coal stakeholders and for climate action, the strategy may already be taking hold.
In October, Ben Butler of The Guardian reported that Rio Tinto has been threatening to shut down its three aluminum smelting operations Australia, which depend on electricity from coal instead of renewables. The company has repeatedly insisted that operations are not sustainable at current electricity costs, considering competition from Asian sources, Butler reported. At the time, Australian policymakers did not take the threat seriously.
Butler cited the country’s former resources minister, Matt Canavan, who said: “If we turn our back on coal, you turn out the lights on aluminum, it’s as simple as that.”
Well, that assumption is not so simple. Rio Tinto grabbed the media spotlight when it announced the new $98 million solar-plus-storage project last month, and it almost certainly caught the attention of coal stakeholders in Australia.
When completed in 2021, the 34-megawatt solar array will fill all of the Koodaideri mine’s electricity demand during peak daylight hours. With 12 megawatt-hours in energy storage capability, Rio Tinto expects solar energy to provide for an average 65 percent of the mine’s electricity demand.
That could be just a sample of things to come as the cost of solar power and energy storage continue to head downward.
And regardless of the critics, Rio Tinto’s climate plan may have real teeth in it after all.
Image credit: Mikolaj Felinski/Unsplash
Editor's note: An earlier version of this story mistakenly stated that Rio Tinto uses 67 percent renewables to power the operations it manages. It uses 76 percent renewables. We regret the error.
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.
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