Rio Tinto (LON:RIO) and the Government of Canada have committed up to C$737 million to reduce the carbon footprint of the Fer et Titane operations, which produce titanium dioxide, iron and steel. Canada is driving investment in the critical minerals market as part of its net zero strategy.
- The funds will be invested in technological innovations and diversifying the project’s critical minerals portfolio.
- This project comes ahead of Canada’s proposed C$3.8 billion critical minerals strategy.
- The mining industry will remain a focus for decarbonisation, as its outputs are fundamental to many low-carbon technologies.
The Rio Tinto Fer et Titane (RTFT) operations are located in Sorel-Tracy, Québec. The is goal of the investment is to bridge the gap between decarbonisation and the need for scaling up critical minerals processing.
How the funds will be invested
The partners plan to deliver a range of projects, such as increasing the production of critical minerals such as lithium, titanium and scandium, which are used to make electric vehicles and batteries. Traditional approaches to cutting the carbon footprint of RTFT will include electrifying furnaces and replacing coal.
The funds will also be used for the development of BlueSmelting, an ilmenite smelting technology that is estimated to cut up to 70% of overall greenhouse gas emissions by reducing the footprint of onsite titanium production. Rio Tinto is currently building a demonstration plant at Sorel-Tracy, which will be completed in 2023.
Rio Tinto has another similar initiative in Canada, the Elysis partnership with Alcoa which is supported by Apple and the local government, which is developing a new smelting technology to produce emissions-free aluminium. The technology is intended to eliminate greenhouse gas emissions by producing pure oxygen instead.
A spokesperson said that these two projects are “unique to Canada in terms of investment by the Government”.
Canada puts critical minerals at the centre of net zero strategy
The Government of Canada is contributing up to C$222 million for RTFT through its Strategic Innovation Fund, which supports large-scale projects in the hope of positioning the country as a major market in the global green economy.
Canada has set a target of a 40% reduction in emissions by 2030. The C$3.8 billion Critical Minerals Strategy is expected to play an important role in this. The policy is still in the works and is intended to accelerate the development of critical mineral resources and the related value chains.
François-Philippe Champagne, the Minister of Innovation, Science and Industry, said: “Supporting the growth of Canada’s critical minerals supply chain will ensure that our country remains a global leader in this strategic sector. Our government is committed to the sustainable development of critical minerals resources, creating good jobs, and building strong global supply chains while strengthening trade relationships with Canada’s closest allies.”
The mining sector is key to decarbonise the world but needs to cut its own emissions
The mining sector has a significant impact on the environment due to its effect on the quality of air, water and soil among others, as well as the potential for high levels of carbon emissions. However, it is also considered a necessary part of the solution, as it provides raw materials used for a range of technologies including electric vehicles, renewable energy generation and even microchips for computers and smartphones.
According to a 2021 report by Accenture, miners are now championing decarbonisation as they see it as a revenue opportunity and as a way to access sustainability-linked funding. This means that miners are also looking at ways to reduce the environmental impact of their own projects, for example by switching to onsite of renewable energy.
Accenture’s report said: “The mining industry has reached a unique juncture where its former image as environmental villain is being shed and replaced as champion of sustainability, principally through decarbonization and its crucial role in providing the raw materials necessary to facilitate the energy transition.”
The partnership between the Canadian government and Rio Tinto demonstrates the importance of fostering innovation by giving incentives to companies across the value chain, rather than imposing blanket decarbonisation targets on certain sectors.
