Rio Tinto targets green future for long-term success

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The company has set its first scope 3 goals to reduce emissions and decarbonise the production of certain metals, which will be outlined in more detail when it releases its annual report next Monday.

Stausholm also discussed the renewal of Rio Tinto’s portfolio and plans for its projects in terms of decades rather than quarter-by-quarter, as it strives for net zero greenhouse gas emissions by 2050.

“There are important decisions to be taken in the next 12 months… to create the portfolio for the next decade and the decade beyond,” Stausholm said.

“We have progressed our major investment projects including replacement mines in the Pilbara where we remain on time and budget to ramp up production at Gudai-Darri (Koodaideri) in early 2022.”

In 2020, Rio Tinto increased its iron ore shipments by 1 per cent and production by 2 per cent, supported by a record total of material moved, contributing to a 3 per cent increase in revenue.

Due to this strong performance, the mining giant will reward its shareholders with $9 billion and a dividend of $6.5 billion, which is the largest in its 148 years of operation.

Rio Tinto’s core assets; iron ore, copper, aluminium and minerals are vital for a green future and not easily substituted, according to Stausholm.

The company is already changing the way it operates at Winu, forming a more agile development pathway including the completion of a feasibility study at Jadar to make a decision to mine by the end of the year.

Part of Rio Tinto’s plan to continue producing the minerals key to growth and development worldwide is understanding its role in society and protecting its social license.

In 2021, Stausholm created the role of chief executive Australia, filled by Kellie Parker, to build and manage meaningful relationships and partnerships with host communities, governments and other stakeholders.

Parker, along with other leaders will engage with Traditional Owners, as the company works to repair relationships with the Puutu Kunti Kurrama and Pinikura (PKKP) people, following the 2020 blast at Juukan Gorge.

Stausholm visited Juukan Gorge with Puutu Kunti Kurrama (PKK) elders this week to express his regret for the damage caused and forge a path forward to rebuild trust.

“The events at Juukan Gorge were a terrible chapter in Rio Tinto’s history,” Stausholm said.

“The rock shelters at Juukan should never have been touched. I will never forget my visit to Juukan Gorge and the hospitality of the PKK elders who demonstrated a commitment to rebuild our partnership.”

UBS managing director Glyn Lawcock commented that Rio Tinto faces a number of challenges in 2021 in addition to ongoing implications from the Juukan Gorge incident.

“Rio Tinto disclosed the removal of 54 million tonnes of iron ore reserves, noting the risks to reserves from potential changes to the Western Australian Mining Act,” Lawcock said.

“Progress on Oyu Tolgoi is (also) mixed. Rio Tinto noted construction work has slowed due to COVID-19 restrictions, albeit a decision to undercut is still expected by the end of 2021.”

Lawcock said the company also faces cost pressures for its Western Australian operations, due to an increase in Pilbara iron ore unit chase costs to $16.7 to $17.7 per tonne.

However, Rio Tinto reported a strong finish to 2020, with earnings before interest, taxes, depreciation and amoritisation (EBITDA) of $US23.9 billion ($30.8 billion), 1 per cent ahead of consensus.