Rio Tinto Advances Decarbonisation with GravitHy, Shares Up Early

In a significant move to contribute to the decarbonization of steelmaking in Europe, global mining leader Rio Tinto has forged definitive agreements with GravitHy, an early-stage industrial company. This collaboration is designed to expedite GravitHy’s ambitious project to reduce carbon emissions in steel production in France.

Rio Tinto's share price (LON: RIO) has reacted positively to the news early in the UK trading day, adding 0.82% and providing some relief after the recent bearish trend.

Rio Tinto has committed to supplying high-grade direct reduction iron ore pellets from its Iron Ore Company of Canada (IOC) operations to GravitHy’s proposed production facility in Fos-sur-Mer, France. Notably, this facility, which is expected to commence operations by 2028, will have an annual iron production capacity of two million tonnes.

Strategically located next to a deep seaport, GravitHy's operation will feature cutting-edge hydrogen production infrastructure supported by grid-connected nuclear power. This innovation will enable the transformation of Rio Tinto's direct reduction pellets into hot briquetted iron (HBI), a process that is anticipated to slash ironmaking-related CO2 emissions by over 90%.

The importance of steel produced with lower carbon emissions cannot be overstated, given that steel production is responsible for approximately 8% of the world’s carbon emissions. GravitHy's project is not only significant for its environmental contributions but also for the French government, which has recognized it as an ‘Industrial Project of Major National Interest'.

Led by CEO José Noldin, GravitHy has been praised for managing one of the most advanced ultra-low-carbon ironmaking projects globally. On the strategic alliance, Simon Farry, Rio Tinto's Head of Steel Decarbonisation, expressed that the partnership dovetails with Rio Tinto's own steel decarbonization strategy, and is particularly aimed at quickening the advent of low-carbon Electric Arc Furnace (EAF) steel manufacturing.

This collaboration is a pivotal step toward reducing Rio Tinto’s Scope 3 emissions, which are the indirect emissions that occur in the company’s value chain. Moreover, this joint effort is expected to forge new pathways for utilizing Rio Tinto’s high-grade iron ore in environmentally-conscious ways.