Rio Tinto Ltd (LSE:ASX:RIO), Australia's largest iron ore exporter, is exploring the possibility of repurposing former mines in the Pilbara region to establish solar power farms. The initiative aims to offset the 3 million tonnes of carbon emissions annually produced by its network of 17 operational mines.
The mining company has set a production target of 323 to 338 million tonnes of iron ore for 2024 and seeks to develop 700 megawatts of renewable energy to replace four gas-fired generators in Pilbara.
Rio is considering disused mines and is also negotiating with traditional landowners over other suitable locations.
To achieve a 50% reduction in emissions, Rio estimates that renewable generation capacity must reach one gigawatt. The company recently installed a 34-megawatt plant with 81,000 solar panels at its Gudai-Darri mine, which has an annual capacity of 43 million tonnes. Rio said it will increase Gudai-Darri’s production to 50 million tonnes, by investing about US$70 million.
Green steelmaking ambitions
Rhodes Ridge in Pilbara and Simandou in Guinea are two high-grade ore deposits that Rio anticipates will support its green steelmaking ambitions.
Rhodes Ridge will support Rio’s Pilbara production for decades, with a 6.7 billion tonne mineral resource at an average grade of 61.6%.
However, Pilbara iron ore is usually of a lower grade suitable for the carbon-emitting traditional blast furnaces that use metallurgical coal in the steelmaking process.
Rio is confident it can develop alternative low carbon steelmaking processes that will maintain the viability of Pilbara’s output, including a pilot project for its trademark BioIron that uses raw biomass and microwave energy instead of metallurgical coal to convert ore to metallic iron.
The current global annual consumption of iron ore is around 2 billion tonnes. Rio forecasts that global demand over the next two decades will surpass consumption in the last 30 years.