Rio Tinto will spend upwards of $A900 million expanding existing plans for solar farms and battery storages to cut carbon emissions from its iron ore mining operations in WA’s Pilbara.
The plan is part of plans for our biggest iron ore miner and exporter to spend $US7.5 billion ($A11.5 billion) on cutting carbon emissions globally over the next 8 years.
Around $US3 billion ($A4.5 billion) will be spent in the Pilbara alone.
Rival BHP says it plans to spend around $US4 billion on similar projects in the Pilbara.
With the third iron ore player, Fortescue committed to spending $6.3 billion on its decarbonising program, the big three iron ore operators will have a total spend of more than $US10 billion by 2030.
To give some context, that sum is roughly equal to the cost of three major new iron ore mines in the Pilbara (Rio’s Gudai-Darri mine that is now building up output cost $US3.1 billion), so it is a considerable commitment.
Rio Tinto said in a statement on Wednesday that the $US600 million (around $A900 million) will see two 100 megawatt (MW) solar power facilities built as well as 200MWh (megawatt hour) of on-grid battery storage in the Pilbara by 2026.
This is in addition to the 34MW of solar power installed at the recently commissioned Gudai-Darri iron ore mine at a cost of around $US100 million.
Initial funding for Rio Tinto’s first major stand-alone solar farm on the Pilbara coast has been approved, a 100MW solar photovoltaic system and associated transmission infrastructure. Construction, which will involve the installation of approximately 225,000 solar panels built to withstand the Pilbara’s cyclonic conditions, is expected to start next year ahead of project commissioning in 2025.
Rio Tinto is talking to State and Local authorities as well as Traditional Owners about the project and relevant approvals. Final capital approval is expected in the June quarter next year.
Rio says the new projects combined are expected to abate around 300,000 tonnes of CO2, equivalent to a 10% cut in total Scope 1 and 2 emissions from Rio Tinto’s iron ore business in the Pilbara based on 2021 levels. It will also reduce gas costs by approximately $55 million per annum at current prices by displacing around 30 per cent of the company’s current gas consumption in the Pilbara.
This new investment forms part of Rio Tinto’s previously announced plan to complete installation of a 1 gigawatt (GW) renewable energy system in the Pilbara as part of a global commitment to invest approximately $7.5 billion to halve emissions by 2030. This will include significant investment in transmission infrastructure to support full decarbonisation of the Pilbara including electrification of mobile and rail equipment beyond 2030 which is estimated to require up to 3GW of installed renewable energy assets.
Rio’s iron ore CEO Simon Trott said in the statement, “The Pilbara is extremely well-positioned to take advantage of renewable power with land, access to people, and abundant wind and solar resources. Our Pilbara electricity grid is the largest privately-owned grid in Australia, ensuring that we have the initial infrastructure required to enable a transition to renewable energy.”
“We expect to invest around $3 billion to install renewable energy assets as well as transmission and storage upgrades in the Pilbara as part of our commitment to halve our emissions from the Pilbara by the end of this decade.”
In June, BHP’s chief legal and external affairs officer Caroline Cox lifted the company’s guidance on decarbonisation spending when she said “we expect to spend around $US4 billion through to 2030 to further reduce our emissions”.
That was after BHP said in 2021 that its decarbonisation spending could rise to between $US2 billion and $US4 billion by 2030. It had started out as a $US400 million figures in 2019.
Fortescue says its plans include the deployment of an additional 2-3 GW (gigawatts) of renewable energy generation and battery storage and the estimated incremental costs associated with a green mining fleet and locomotives.
The miner says the cost to purchase the new locomotive fleet “will be aligned with the scheduled asset replacement life cycle and included in Fortescue’s sustaining capital expenditure. Studies are underway to optimise the localised wind and solar resources.”
