Miner to tap into green transition opportunities
Company seeks to decarbonise steel value chain
Beijing: Rio Tinto, the world’s largest iron ore producer, had more tie-ups and joint ventures with Chinese partners last year than ever before in its history, its top executive says, amid further opening-up and industrial reforms that have provided massive business opportunities for multinational corporations in the country.
“China is hugely important for Rio Tinto as this is the place where we have our biggest customers, our biggest shareholder and almost 60% of our revenue,” said Jakob Stausholm, chief executive officer of Rio Tinto, on the sidelines of the China Development Forum last Sunday in Beijing.
“The rapid development of solar and wind power, grid extension and electric vehicles in the country, in which China has been taking the world lead, gives more demand for products that Rio Tinto provides, not least copper, aluminium and battery materials. The green transition is a whole new business opportunity for us,” Stausholm said.
He said the supply chain for China’s green transition is a whole new business opportunity for multinational corporations like Rio Tinto.
“We saw last year that there was increasing demand from the steel mills for our iron ore and more recently strong demand in areas like copper, which are good indicators for an economy that is growing,” he said.
An analyst said the current green transition of China’s steel industry will require international mining companies like Rio Tinto to supply more high-quality ore, presenting them with huge opportunities.
“With the introduction of new quality productive forces and the trend of decarbonisation, the steel industry will gradually shift from high-growth to high-quality development,” said Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management.
“This will provide Rio Tinto with greater growth opportunities. Additionally, China’s increasing global presence in fields such as new energy vehicles and renewable energy will require more high-quality imports of copper, aluminium, and other products.”
To meet the growing demand for mineral products in China, Rio Tinto has vowed to step up investment and partnerships with Chinese partners in the future.
The company has finalised construction of the Oyu Tolgoi mine in Mongolia. It will eventually be the world’s fourth-largest copper mine and the copper concentrate currently all goes into China.
Rio Tinto received approval last year from the Australian and Chinese governments for joint development between Shanghai-based China Baowu Steel Group Corp and itself on the Western Range project, an iron ore mine in Western Australia.
According to Stausholm, the accelerating development of new quality productive forces in China is expected to bring greater opportunities for multinational corporations like Rio Tinto.
The upgrade and transformation of the Chinese industry is leading to massive demand for products as well as business opportunities for Rio Tinto, he said.
“The policy framework, focusing on higher quality growth and higher added value, is providing opportunities for further opening up. It will help reform the existing businesses, including the steel industry, by decarbonising,” he said.
As the world’s largest steel producer, China has a huge demand for iron ore, the raw material for steelmaking, which is also one of the major industries producing carbon emissions.
Rio Tinto is looking to explore potential collaborations and partnerships with Chinese partners to enhance its business in the mining and resources sector, he said.
“Rio Tinto has been trying to buy more materials and services in China, as we are selling a lot into China and we really think that we can get a lot of value from here,” he said.
According to Stausholm, Rio Tinto has been investing heavily in research and development projects related to reducing carbon emissions of current steelmaking processes as well as technologies for steelmaking in the future.
It signed an agreement with state-owned Baowu, the world’s top steelmaker, last year to explore a range of industry-leading projects in China and Australia that will help decarbonise the steel value chain. — China Daily/ann