Rio Tinto to pump $7.5 billion to cut 50% carbon emissions by 2030

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Rio Tinto, a leading global mining group, has recently announced a plan of investing $7.5 billion to reduce its carbon emissions by 50% by 2030. A reduction which is three times its previous target. However, the firm's shares fell as soon as the news of the high spending was announced.

Steel and iron ore producers are constantly putting multiple efforts to reduce carbon emissions in contrast to global climate commitments by 2050. Rio stated that the firm has sought to half its scope 1 and 2 carbon emissions and certain types of indirect emissions, respectively – in the decade.

Rio expedited its aim for a 15% reduction in emissions from 2018 to 2025, five years earlier than it had previously planned.

To help meet its goal, Rio will expand renewable energy generation, increase research and development investment on decarbonization routes, and double its spending on minerals that are crucial to energy transition to roughly $3 billion per year by 2023.

Rio increased its capital investment estimates for 2022 from $7.5 billion to $8 billion, with plans for $9 billion in 2023 and $10 billion in 2024. RBC estimated that spending will be $6.8 billion in 2023 and $5.8 billion in 2024.

On the other hand, Rio did not commit on large-scale reductions in its customer emissions, which are presently set at 30% by 2030.

Rio's new objectives outperform competitor BHP Group's, which aims to reduce operating emissions by 30% by 2030 but falls short of Fortescue Metals Group's plans.

The company also plans to decarbonize its Australian aluminum smelters on Boyne Island and Tomago, which will need 5GW of solar and wind power generation. Rio's aluminum industry is responsible for around 70% of the company's direct and indirect emissions.

Source Credit - https://finance.yahoo.com/news/rio-tinto-aims-halve-carbon-055629678.html