Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) has teamed up with two European companies to explore production of low-emissions hot briquetted iron (HBI) in Canada, amid increasing pressure from stakeholders to make steelmaking a more environmentally-friendly activity.
The mining giant, which has been working on cutting the sector emissions since 2019, has inked a memorandum of understanding with Luxembourg-based engineering firm Paul Wurth S.A. and German steelmaker SHS-Stahl-Holding-Saar GmbH & Co. KGaA.
The partners will explore the viability of transforming iron ore pellets into low-carbon hot briquetted iron (HBI), a low-carbon steel feedstock, using green hydrogen generated from hydro-electricity in Canada.
"Canada provides access to cost competitive hydro-electricity, and proximity to key markets in Europe and North America," Rio Tinto stated in a news release. "When processed in an electric arc furnace with carbon-free electricity, [the new process] has the potential to reduce significantly the carbon emissions associated with steelmaking."
Iron Ore Company of Canada (IOC), which is majority-owned by Rio Tinto, will supply high-grade iron ore for the project, with a feasibility study for potential industrial scale low-carbon iron production scheduled to be completed in late 2021.
As a part of Rio Tinto's climate strategy, the partnership will "support the development and deployment of low-carbon technologies for hard-to-abate processes like steelmaking," IOC president and CEO Clayton Walker, said in the statement.
The announcement builds on the group's decision, unveiled in December, to invest US$10 million in low-carbon steelmaking projects over the next two years, as part of its partnership with China Baowu Steel Group, the nation's largest steel producer.