Rio Tinto has announced it will spend $1bn to reach net zero emissions by 2050.
Commenting, Julian Kettle, Wood Mackenzie Vice Chairman of Metals and Mining, said:
"The announcement by Rio Tinto regarding its plans to decarbonise is a small but significant step in the right direction. However, changes need to be far bolder at a corporate, government and societal level.
"Setting Rio Tinto’s $1bn in context, this represents just 16% of the dividend it distributed in 2019 or just under 5% of its reported EBITDA of $21.2bn for the same year.
"Put another way, on a 100% basis, Rio Tinto reported iron ore production of 327Mt in 2019. A $1bn dollar green investment, while laudable, could be funded by a $3/tonne rise in the iron ore price. The industry needs to do much more.
"Having said this, miners are caught between a rock and a hard place. The coronavirus, falling prices and the spectre of oversupply across most mined commodities are issues that are not conducive to a massive expansion of capex or expenditure that will take years to provide a “green dividend".