In its endeavour to lower carbon emissions by 50% by 2030, Rio Tinto (RIO) has revealed plans to buy four electric trains for the Pilbara region of Western Australia. The company engages in the exploration, mining and processing of mineral resources in over 35 countries.
The production of the 7MWh FLXdrive battery-electric locomotives purchased from Wabtec Corporation is expected to commence in the United States in 2023.
Notably, the engines will be designed in a way that they can generate additional energy, while in transit, through a regenerative braking system.
By adopting net-zero emissions technology in its entire fleet of rail locomotives, Rio Tinto will be able to reduce Iron Ore’s diesel-related carbon emissions in the Pilbara region by around 30% annually.
The Managing Director of Port, Rail and Core Services at Rio Tinto, Richard Cohen, said, “Our partnership with Wabtec is an investment in innovation and an acknowledgement of the need to increase the pace of our decarbonisation efforts.”
Last month, Jefferies analyst Christopher LeFemina maintained a Hold rating on Rio Tinto and lowered the price target to $65 from $71. The new price target implies 10.6% downside potential from current level.
Consensus among analysts is a Moderate Buy based on 2 Buys and 2 Holds. The average RIO price target stands at $76.6 and implies upside potential of 5.4%.
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Rio Tinto with 5.3% of investors on TipRanks increasing their exposure to RIO stock over the past 30 days.
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