Rio Tinto to receive $13.4 million for decarbonization from the Canadian government

The Canadian government has allocated CAD 18.1 million (USD 13.4 million) from the Low Carbon Economy Fund to Canadian iron ore company Rio Tinto – Iron Ore Company (IOC). The funds are intended to support the decarbonization of iron ore processing at Labrador West, Rio Tinto said.

The allocated amount is approximately 25% of the total project cost, the rest will be financed by IOC.

This funding will allow IOC to reduce the amount of fuel oil used in the production of iron ore pellets and concentrate. The company will install an electric boiler to replace the boilers that operate on it, as well as introduce new equipment and energy-efficient burners to further reduce fuel oil consumption in the roasting machines.

Over the course of this project, Iron Ore Company will reduce greenhouse gas emissions by approximately 2.2 million tons. Installation of the new equipment will begin in the second quarter of 2024 and is expected to be completed in the first half of 2025.

“The Iron Ore Company has plans to decarbonize and continue to produce high quality iron ore with the lowest carbon intensity in the world right here in Canada. This project alone will reduce IOC’s greenhouse gas emissions by approximately 9%,» said Mike McCann, the company’s president and chief executive officer.

Rio Tinto is the majority shareholder of IOC, a joint venture owned by the company in partnership with Mitsubishi and Labrador Iron Ore Royalty Income Corporation. Its iron ore production capacity is 23 million tons per year, with approximately 12.5 million tons of raw material per year available for processing into high-quality pellets.

As GMK Center reported earlier, Rio Tinto and BHP Group will team up with Australian rolled steel producer BlueScope Steel to explore the development of Australia’s first pilot electric smelter (ESF) to produce green pig iron. The cooperation aims to demonstrate that pig iron production from Pilbara ore is possible using renewable energy in combination with direct reduced iron (DRI) technology.