Rio Tinto and BlueScope Steel to explore green energy to reduce carbon footprint

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 Rio Tinto and BlueScope Steel to explore green energy to reduce carbon footprint
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Highlights 

  • Rio Tinto Limited and BlueScope Steel have agreed to explore low-carbon steelmaking processes.
  • Rio Tinto is the largest supplier of iron ore for BlueScope Steel.
  • With rapid advances in technologies, a greater number of projects will be utilising newer technology to scale further.

As Australia aims to lower its carbon footprint by 35% below the 2005 level by 2030, big steelmakers are bracing to step up their game. One of Australia’s largest miners, Rio Tinto Limited (ASX:RIO), with a market capitalisation of AU$34.4 million and BlueScope Steel Limited (ASX:BSL) have agreed to explore low-carbon steelmaking processes. Rio Tinto is the largest supplier of iron ore for BlueScope Steel and has committed to reach net zero carbon emissions by 2050.

Carbon emission

Image Source: catazul from Pixabay

The companies are looking to reduce Pilbara’s iron ore with environment-friendly clean hydrogen in place of widely used coking coal at BlueScope’s Port Kembla Steelworks. The hydrogen will be produced from renewable sources of energy.

Both the companies have signed a Memorandum of Understanding (MOU), under which they will jointly explore, research and design environment-friendlier processes for iron ore processing, steel making and other related technologies.

Rio Tinto and BlueScope Steel to explore green energy to reduce carbon footprint

The MOU expands an already joint study of green technologies to curb carbon emissions from the existing process of manufacturing iron and steel. As newer technologies develop, a greater number of projects will be added to scale further. With BlueScope witnessing a record year on robust demand for its steel products in both domestic and international market, the management has decided to channelise AU$150 million over five years to decarbonise its operations.

Read More: Is New Zealand on the right path to become a zero-carbon country?

Management Commentary

BlueScope Chief Executive Mark Vassella said, “We are pleased to be working with Rio Tinto, who supply the majority of iron ore to our Port Kembla plant. It’s a natural fit for us both and a meaningful opportunity for Australian steelmaking and mining to explore ways of contributing to emissions reduction targets. The new collaboration will focus on utilising green hydrogen for direct reduction of Rio Tinto’s Pilbara iron ores, which will then be fed into a melter.”

Rio Tinto Iron Ore Chief Executive Simon Trott said “‘We are excited to sign this MOU with leading steelmaker BlueScope, a key customer of ours in Australia, and extend our partnership to low carbon iron and steelmaking. This partnership will benefit from BlueScope’s experience and know-how in using electric melters at its New Zealand steelworks, Rio Tinto’s experience in the Atlantic direct reduction market and the R&D capability and the experience of both Rio Tinto and BlueScope in iron ore processing.”

Bottom Line

Just a few days before a two-day COP26 meet at Glasgow, Scotland, on climate change, Australia’s miners and steelmakers have declared to further explore the use of green hydrogen for a revamp or steelmaking process, that could potentially lower carbon emissions.

This is seen as a major step to complement Australia’s target to lower its carbon footprint and achieve net zero carbon emission target by 2050.    

Read More: Morrison: Australia on track to beat 2030 emissions target

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