British-Australian company Rio Tinto plc (GB:RIO) has secured a 25-year contract with one of Australia’s largest solar mining farms to provide renewable power to its Gladstone project. European Energy Australia is building a 1.1 gigawatt Upper Calliope Solar Farm in Queensland, promising to be Australia’s biggest solar project to date. By purchasing all of the renewable energy produced by Upper Calliope, Rio Tinto will reduce its carbon emissions significantly.
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Rio Tinto is a multinational mining company that extracts several minerals, including iron ore, aluminium, copper, diamonds, energy products, gold, and industrial minerals. The company’s major mining operations are in North America and Australia. RIO shares are up 1.7% on the news as of the last check.
More About Rio Tinto’s Decarbonization Efforts
Rio’s aluminium mining operations contribute the largest amount of carbon emissions for the mining giant. RIO has a goal to reduce the direct and indirect emissions by half on Australia’s east coast by 2030. Importantly, the deal with the Upper Calliope solar project will help Rio Tinto cut its carbon emissions by 1.8 million tonnes annually.
The Upper Calliope project is awaiting development and grid connection approval, following which it will start construction work by 2025-26. Once completed, the solar farm will suffice roughly 5% of Queensland’s current renewable energy demand.
Furthermore, Rio Tinto has also welcomed proposals from energy companies to repower its three production sites in Gladstone – the Boyne aluminium smelter, the Yarwun alumina refinery, and the Queensland Alumina refinery. While Upper Calliope has successfully submitted an application for the Gladstone project, Rio Tinto said that it will continue to assess other proposals for the Gladstone project, which requires more than 1GW of power to operate.
Is Rio Tinto a Buy or Sell?
Yesterday, Berenberg Bank analyst Richard Hatch reiterated a Buy rating on RIO stock with a price target of 6,200p (12.8% upside). At the same time, RBC Capital analyst Tyler Broda reiterated a Hold rating on the stock with a price target of 6,100p (11% upside).
Overall, with 11 Buys and two Hold ratings, RIO stock has a Strong Buy consensus rating on TipRanks. The Rio Tinto plc share price forecast of 6,480.83p implies 17.6% upside potential from current levels. RIO shares have lost over 12% in the past year.
