Rio forges green links

Partnership with China to curb emissions

RIO Tinto has formed a new partnership with China’s biggest steelmaker to work out ways to cut greenhouse gas emissions from the production process.

The agreement with China Baowu Steel Group follows rival BHP catching the global mining industry off guard by pledging to set goals for its customers to reduce their carbon dioxide emissions.

Emissions generated by mining customers, such as Chinese steel mills which transform Australian iron ore and coking coal into steel, are known as scope 3 emissions.

The mining industry has to date shied away from addressing scope 3 emissions, focusing instead on reducing scope 1 and 2 emissions generated by their own businesses.

Both BHP and Rio have come under mounting pressure from activist shareholders to take responsibility for emissions generated by the products they sell.

At the same time, BHP’s pledge to “influence” the emissions of its customers has sparked push back from the Federal Government which has criticised corporate Australia for paying too much attention to “noisy” campaigns around social issues rather than delivering for “quiet Australians”.

Rio’s partnership with Baowu also includes the participation of the prestigious Tsinghua University in Beijing, widely considered the best higher-learning institute in China.

Emissions from making steel account for between 7 per cent and 9 per cent of the world’s total carbon emissions.

Rio chief Jean-Sebastien Jacques said the partnership would develop and implement new methods to reduce carbon emissions and improve the environmental performance of the steel making process.

“The materials we produce have an important role to play in the transition to a low carbon future and we are committed to partnering with our customers and others to find the most sustainable ways to produce, process and market them,” he said.

Baowu chairman Chen Derong said the manufacturer was “committed to ecological and sustainable development”.

“We will promote sustainable production through intelligent manufacturing,” he said.