Rio Tinto and Schneider Electric to drive decarbonisation
Rio Tinto and Schneider Electric have signed a memorandum of understanding (MoU) for a first of its kind collaboration to develop a circular and sustainable market ecosystem for both companies and their customers.
Rio Tinto and Schneider Electric partnering to promote the use of responsibly sourced materials
The multi-product partnership will see Schneider Electric use responsibly sourced materials produced by Rio Tinto. These include low-carbon aluminium and copper produced with renewable power, iron ore, and borates. Rio Tinto will utilise energy and industrial services from Schneider Electric, as the companies work together to develop digital platforms, technologies and solutions to be deployed across the metals and mining supply chain to drive further decarbonisation.
Rio Tinto Chief Commercial Officer Alf Barrios commented: “This unique partnership will help accelerate decarbonisation and renewable energy solutions by combining low-carbon materials with cutting-edge digital technology. Working together will allow Rio Tinto and Schneider Electric to pursue opportunities beyond what is possible for either company on its own.
“This collaboration also opens doors to consider strategic initiatives such as expanding the use of artificial intelligence and predictive analytics to reduce downtime in our plants, digitization of our supply chains, and a host of other transformative technologies.”
Schneider Electric is helping Rio Tinto meet the decarbonisation challenge
Schneider Electric Executive Vice-President Industrial Automation, Barbara Frei-Spreiter said: “We are excited to work with Rio Tinto to develop clean and pioneering solutions to meet industrial decarbonisation challenges. As the world’s most sustainable corporation and a manufacturer with a global network of smart factories and smart distribution centres, Schneider Electric is on a mission to make industries of the future eco-efficient, agile, and resilient through open, software-centric industrial automation and sustainable energy solutions. This new partnership demonstrates that Rio Tinto is as passionate as we are about bridging progress and sustainability for all.”
The partnership will draw on Schneider Electric’s Energy as a Service expertise to evaluate the use of innovative solutions, including microgrids, to supply energy from low-carbon sources, and artificial intelligence and advanced analytics to help meet sustainability goals at Rio Tinto sites and throughout its supply chain.
Rio Tinto’s START traceability and transparency initiative, the first sustainability label for aluminium using blockchain technology, will be deployed with Schneider Electric to unlock value for customers, suppliers and partners. The companies will work to expand this transparency, offering START in combination with Schneider Electric’s EcoStruxure™ platform, an IoT system architecture that connects everything in an enterprise, from the shop floor to the top floor, to deliver enhanced safety, reliability, efficiency, and sustainability.
The companies will also partner to evaluate emerging innovation opportunities, such as the efficient production of critical materials for renewable technologies and advances in low-carbon, green steel manufacturing, both of which will play a significant long-term role in industrial decarbonisation.
BHP deliberates ditching fossil fuels for greener mining
The world’s biggest miner, Australian-based BHP, is supposedly considering withdrawing from a multi-billion dollar contract, which would see the company generate more than US$2bn due to mounting pressure over aligning its business with ongoing climate concerns and ESG-compliance measures.
Exiting the agreement would mean BHP escalate its distancing from oil and gas and subsequently cut down on the amount of fossil fuels used by the company when mining.
It’s estimated that the petroleum business being debated upon could actually be worth around US$15bn but is still under talks to be put up for sale.
Global Mining Giant Considers Greener Future
BHP has made itself clear that it wants to avoid becoming unable to sell its assets. As competition within the market increases following higher numbers of oil giants wrestling with investors to deal with climate pressure, so too are the number of mining rivals looking to make environmental changes for the future.
However, BHP currently has the upper hand as a stalwart mining company that established itself back in the 1960s, allowing it the time to grow and dominate over other fast-appearing mining competition.
Mike Henry, BHP Chief Executive, has an optimistic outlook for the future of oil and gas despite worries over rising demand to align his business with the Paris Climate Agreement. Henry argues that prices remain promising due to a lack of industry-wide investment.
BHP’s petroleum business won’t be easy to say goodbye to. Forecasted to generate around 6% of profits during the ongoing financial year (US$2bn), and around US$1.6bn revenue produced by BHP petroleum in the six months leading to December 2020, BHP is due to take a hit no matter what agreement they choose.
On the other hand, distancing itself from thermal coal and petroleum would arguably aid the company’s case to possible - and valuable - investors who may be required to fund BHP’s increased output to places such as Australia and Mexico in the near future.
BHP considers cutting billion-dollar contract to aid climate
An exit away from petroleum has the potential to be “a powerful corporate catalyst,” says Dominic Kane, Analyst at JP Morgan.
“We believe an exit would likely ring-fence BHP’s exceptional cash flows for non-fossil fuel organic growth, mergers and acquisitions and generous shareholder distributions since BHP could avoid a major new capital investment phase this decade in petroleum.”
BHP is also set to sanction a giant US$5.7bn Canadian potash mine in August of this year, already seeing potash as a long-term substitute for gas and oil going into the future. The company has also previously announced plans to abandon its 80% share in its joint endeavour with Mitsui, owner of two lower-quality mines in Queensland, Australia.
BHP is scheduled to report its annual results on August 17, after which it may become clearer on whether the company will choose to focus its shift to a low-carbon economy or whether it will stay with its current contract into the coming year.