Rio Tinto assesses plans for more “green energy” metals

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Benchmark prices for lithium products, which fell sharply in 2018 as an influx of new supplies collided with a slowdown in sales of electric vehicles, have risen dramatically this year and have now more than doubled.

Mr Stausholm said Rio’s most immediate target will remain the Jadar lithium project, which the company seeks to move forward as quickly as possible.

“But there could be other similar projects,” he said. “It is impossible to be very specific because the way the market has changed over the past 12 months is very volatile.”

In the latest sign of large emitters responding to increasing societal pressure on climate change, Rio said last week it would more than triple its carbon reduction targets for 2030 by 15 to 50 percent, before achieve net zero emissions by 2050.

Kaan Peker, a Royal Bank of Canada analyst based in Sydney, described the new goals and the pledge to spend more on clean energy metals as a “much needed change in strategy” and positive long term.

“Lower emissions and more growth and diversification should help support Rio Tinto’s investment case,” he said.

“Much like the challenges the world itself faces in the transition to decarbonization, hard choices must be made and the transition is likely to be difficult and add uncertainty. “

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Rio’s decision to increase spending comes at a time when the outlook for its main producer, iron ore, remains under pressure amid slowing demand from Chinese steel mills. Mr Peker said this is likely to negatively affect market sentiment.

“So even though we think this is the right strategy, it may take a long time for the stocks to reflect this,” he said.


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