TIDMRIO
RNS Number : 6409P
Rio Tinto PLC
20 October 2021
20 October 2021
Rio Tinto to strengthen performance, decarbonise and grow
Today, Rio Tinto is outlining the actions being taken to
strengthen the business and improve performance. It is also
unveiling a longer-term strategy to ensure it thrives in a
decarbonising world and continues to deliver attractive shareholder
returns, in line with its policy.
The deployment of the Rio Tinto Safe Production System is
underway to ensure the Group regains its position as Best Operator.
The Group is combining systematic long-term programmes with rapid
improvement activities targeted at bottlenecks in order to reduce
operational variability and increase resilience.
Governments are setting more ambitious targets and accelerating
actions on climate change. Society at large is also demanding
companies take more action to decarbonise. To meet the challenge,
stay relevant and capture the opportunity Rio Tinto is raising its
ambition and taking actions.
The Group is unveiling a new target to reduce its Scope 1 &
2 carbon emissions by 50 per cent by 2030, more than tripling its
previous target. A 15 per cent reduction in emissions is now
targeted for 2025, five years earlier than previously. These
targets are supported by around $7.5 billion of direct investments
to lower emissions between 2022 and 2030.
In recognition of the broader carbon footprint of the
commodities it produces, Rio Tinto will accelerate its investment
in R&D and development of technologies that enable its
customers to decarbonise. Working in partnership with governments,
suppliers, customers, academia and others Rio Tinto will continue
to develop technologies like ELYSIS(TM) for carbon-free aluminium
and multiple pathways to produce green steel.
To meet additional demand created by the global drive to net
zero emissions, Rio Tinto will prioritise growth capital in
commodities vital for this transition with an ambition to double
growth capex to about $3 billion a year from 2023.
Rio Tinto can decarbonise, pursue growth and continue to deliver
attractive returns to shareholders due to its strong balance sheet,
world-class assets and focus on capital discipline.
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.
"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."
Key points from the presentation include:
-- 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 (CO(2) equivalent - equity basis).
-- $7.5 billion in direct capital expenditure decarbonising Rio
Tinto's assets from 2022 to 2030. This includes $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.
Iron ore
-- Medium-term Pilbara iron ore system capacity of between 345
million and 360 million tonnes per year (on a 100% basis)(1) .
-- Decarbonisation of the Pilbara will be accelerated by
targeting the rapid deployment of 1GW of wind and solar power,
replacing natural gas power for plant and infrastructure and
supporting 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 ELYSIS(TM) to eliminate carbon emissions from
the smelting process is progressing, with commercial scale
technology on track for 2024.
[1] Medium-term defined as upon completion of the next tranche
of new replacement mines, including Western Range, Bedded Hill Top
and Hope Downs 2 and Brockman Syncline 1 to reach and sustain the
upper end of the range on capacity. These mines are expected to
start commissioning from 2025.
Contacts Please direct all enquiries to media.enquiries@riotinto.com
Media Relations, UK Media Relations, Australia
Illtud Harri Jonathan Rose
M +44 7920 503 600 M +61 447 028 913
David Outhwaite Matt Chambers
M +44 7787 597 493 M +61 433 525 739
Media Relations, Americas Jesse Riseborough
Matthew Klar M +61 436 653 412
T +1 514 608 4429 Investor Relations, Australia
Investor Relations, UK Natalie Worley
Menno Sanderse M +61 409 210 462
M: +44 7825 195 178 Amar Jambaa
David Ovington M +61 472 865 948
M +44 7920 010 978
Clare Peever
M +44 7788 967 877
Rio Tinto plc Rio Tinto Limited
6 St James's Square Level 7, 360 Collins Street
London SW1Y 4AD Melbourne 3000
United Kingdom Australia
T +61 3 9283 3333
Registered in Australia
T +44 20 7781 2000 ABN 96 004 458 404
Registered in England
No. 719885
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto's Group Company Secretary.
riotinto.com
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