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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.