Rio Tinto (RIO) is building a solar power plant at its Diavik mine.

Rio Tinto RIO has completed construction of a 3.5-megawatt solar plant at its Diavik diamond mine. It is the largest off-grid solar plant in Canada’s Northern Territories. This initiative aligns with RIO’s global decarbonization goals, which include a 50% reduction in Scope 1 and 2 emissions by 2030 and achieving net-zero emissions by 2050.

In line with this, RIO has also announced plans to build two new 5.25 MW solar farms at Gumatj and Rirratjingu on the Gove Peninsula in Australia’s Northern Territory. They are expected to reduce the region’s annual diesel consumption by around 20% and cut annual carbon dioxide emissions by more than 12,000 tonnes.

The Diavik Solar Power Plant is equipped with 6,620 solar panels. In addition to using direct sunlight, these double-sided panels will generate energy from light reflected off the snow that covers Diavik most of the year. The plant is expected to generate about 4.2 million kilowatt-hours of emission-free electricity per year. This will reduce the site’s diesel consumption by about 1 million liters per year. The plant is expected to reduce emissions by 2,900 tons of CO2 equivalent, which is almost the same as eliminating the emissions of 630 cars.

The solar plant contributes to Diavik’s efforts to increase renewable energy generation at the site. It already has a wind farm that is the largest wind installation in northern Canada. The wind farm has generated more than 195 million kilowatt-hours of electricity since it began operating in 2012, reducing CO2 emissions by 118,000 tons and saving the equivalent of 43.4 million liters of diesel fuel.

In 2023, Rio Tinto Scope 1 and 2 emissions were 32.6 Mt CO2e, a 5.5% reduction from a 2018 baseline. The company spent $130 million on decarbonization projects in 2023.

Rio Tinto plans to invest $5-6 billion in capital by 2030 to drive its decarbonization strategy. The company made some progress on its sustainability efforts in the first half of fiscal 2024.

The company recently announced that it intends to install zero-emission aluminum smelting cells at its Arvida smelter in Quebec, Canada, using the first technology license issued by the ELYSIS joint venture. ELYSIS’ breakthrough technology aims to eliminate all direct greenhouse gases from the conventional aluminum smelting process by producing oxygen as a byproduct, while improving efficiency by producing more aluminum at a lower cost.

Rio Tinto is also investing $143 million to develop a research and development facility in Western Australia to test the effectiveness of its groundbreaking, low-emission iron production process, BioIron.

In May 2024, Rio Tinto and Health and Safety Group BHP has joined forces to test large, battery-powered tipper trucks manufactured by Caterpillar CAT and Komatsu KMTUY in the Pilbara region of Western Australia.

Testing will begin in the second half of 2024 with two Cat 793 mining trucks. This will be followed by testing of two Komatsu 930 mining trucks in 2026. BHP will test the Caterpillar trucks and Rio Tinto will test the Komatsu trucks. This collaboration between two of the world’s leading miners and two of the world’s largest mining truck manufacturers also aims to address the critical challenge of zero-emission transportation.

BHP Group is also pursuing its long-term goal of achieving net zero Scope 3 greenhouse gas emissions by 2050. The company expects to reduce its greenhouse gas emissions from operations by at least 30% from 2020 levels by 2030.

In fiscal 2023, BHP spent $122 million on emissions reduction initiatives in areas such as steel production and transportation. From fiscal 2024 through 2030, the company expects to spend about $4 billion on operational decarbonization, and the plans reflect an annual capital allocation of about $250 million to $950 million per year over the next five years.

Price Performance and Zacks Rank

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Rio Tinto shares have gained 4.7% over the past year, while the industry has fallen 2.4%.

Rio Tinto currently has a Zacks Rank of #3 (Hold). You can see complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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