Rio Tinto Ltd (ASX: RIO) shares are falling on Tuesday after iron ore weakness offset some interesting news.
At the time of writing, the mining giant’s shares are down 0.6% to $127.72.
What news was announced?
Rio Tinto has announced plans to invest US$143 million (A$215 million) to develop a research and development facility in Western Australia.
This is to further assess the effectiveness of its low-carbon ironmaking process, BioIron, to support decarbonising the global steel value chain.
According to the release, the development of the BioIron Research and Development Facility in the Rockingham Strategic Industrial Area, south of Perth, follows successful trials of the innovative ironmaking process in a small-scale pilot plant in Germany.
What is BioIron?
Rio Tinto advises that BioIron uses raw biomass and microwave energy instead of coal to convert Pilbara iron ore to metallic iron in the steelmaking process.
When combined with the use of renewable energy and carbon-circulation by fast-growing biomass, BioIron has the potential to reduce carbon emissions by a whopping 95% compared with the current blast furnace method.
And while the company acknowledges that it is aware of the complexities around the use of biomass supply, it is working to ensure only sustainable sources of biomass are used.
The mining giant’s BioIron facility will include a pilot plant that will be ten times bigger than the small-scale pilot plant in Germany. It will also be the first time the innovative steelmaking process has been tested at a semi-industrial scale. Management expects it to be capable of producing one tonne of direct reduced iron per hour.
Importantly, it will provide the required data for Rio Tinto to assess further scaling of the technology to a larger demonstration plant.
‘World-first technology’
Rio Tinto’s Iron Ore chief executive, Simon Trott, is excited by the technology and sees it as a way of helping to decarbonise the planet. He said:
The world needs low-carbon steel to reach net zero, and we are working to make this a reality by finding better ways to turn our Pilbara ores into steel. BioIron is a world-first technology that has the potential to play a significant role in a low-carbon steel future.
This research and development facility will further test the BioIron process, showcase Western Australian innovation capability, and further demonstrates Rio Tinto’s commitment to supporting and enabling the decarbonisation of the steel industry.
Rio Tinto shares are up almost 15% over the last 12 months.
The post Own Rio Tinto shares? Why this ‘world-first technology’ is making news appeared first on The Motley Fool Australia.
Should you invest $1,000 in Rio Tinto Limited right now?
Before you buy Rio Tinto Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
See The 5 Stocks
*Returns as of 5 May 2024
More reading
- Buy Rio Tinto and these ASX dividend stocks for 5%+ yields
- Rio Tinto shares marching higher amid an ‘exciting new chapter’ for production
- Will ASX copper shares keep surging from here? (Plus: 2 top picks for exposure)
- Buy Rio Tinto and these excellent ASX dividend shares
- Rio Tinto share price sinks amid gas woes
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Leave a Reply