China's carbon goals strike a chord with Rio Tinto, CEO says
Rio Tinto Group Plc, the world's biggest iron ore miner, is anticipating huge growth opportunities in China, after the country, which accounted for more than half of its global revenue last year, reiterated its intent to reduce carbon emissions earlier this month, a top company official said.
China's resilient economy has helped support iron ore prices and product sales even during the COVID-19 pandemic and sustained the Anglo-Australian company's cash flows in the past few years, according to Jakob Stausholm, chief executive officer of Rio Tinto.
The Chinese government's steady long-term development plans, including Beijing's 2035 vision and 14th Five-Year Plan (2021-25), have provided certainty for Rio's long-term plans. The clear targets on climate change and the stable regulatory environment give the company more room to operate, said Stausholm.
"Together with the government's determined resolve to cut carbon emissions, we are more certain about our prediction on the demand for iron and copper and will continue investing in China and deepen its partnerships with local players," he said.
Zhu Yi, a senior analyst for metals and mining at Bloomberg Intelligence, said iron ore prices may remain high due to the strong demand from China, as well as improving overseas demand amid the global recovery from the pandemic.
She estimates global crude steel output to increase this year, after a 0.9 percent year-on-year decline in 2019.
China's crude steel output rose to a record 1.05 billion metric tons in 2020, up 5.2 percent on a yearly basis, according to the National Bureau of Statistics.
Stausholm also spoke highly of the country's commitment to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.
While the climate change has been on the agenda for quite a while in some European countries, Stausholm said China's green development endeavors have helped society to develop in a sustainable manner.
He said the standards that China sets will have more influence around the world as its economy continues to grow. Other countries will follow China's lead on sustainable development, he said.
China is making rapid development, with substantial progress in the fields of clean energy and many business leaders are also coming up with low-carbon development plans, and the actions will only be faster in the future, he said.
"We are never going to know the future with certainty, but before we invest billions of dollars in transformative projects that will run for many decades, we need to be confident about the rules that will govern their operation, and the clear targets announced by China are a good example of this," he said.
Rio Tinto will step up efforts to cut carbon emissions in the entire industry chain with local partners, and the company will minimize the environmental impact of operations through collaborations with partners and customers.
Zhu said global mining companies like Rio Tinto have been investing huge amounts to reduce carbon dioxide emissions in their business operations.
They have also collaborated with Chinese metal producers on developing emission reduction production technology, to facilitate green development from upstream miners to downstream processors, to meet China's carbon neutrality goals, she said.
The company said its products will provide the foundation for many green technologies now being developed in China, like metals and minerals used to build batteries, wind turbines, solar panels and energy-efficient buildings. The company's local partners, including Tsinghua University and China Baowu Steel Group, are also helping drive China's green transformation.
Rio Tinto has reduced emissions by almost 40 percent over the past decade and is aiming for zero net carbon emissions by 2050.