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Rio Tinto's (RIO) Boron Mine Transitions to Renewable Diesel

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Rio Tinto (RIO - Free Report) announced that its Boron, CA operation will now operate with a fleet running on renewable diesel. This makes it the first open pit mine in the world to manage this feat and is a step forward in RIO’s journey toward its carbon-reduction goal.

This transition of the heavy machinery at the site from fossil diesel to renewable diesel is expected to result in an annual reduction in carbon dioxide emissions by up to 45,000 tons. This aligns with RIO’s global decarbonization objectives, which include a 15% reduction in Scope 1 & 2 emissions by 2025, and 50% by 2030. The company has made a commitment to reach net zero emissions by 2050.

Rio Tinto has been mining borates, a naturally occurring mineral, from the Boron mine since 1927. It is currently considered one of the richest deposits of borates in the world. The mine produces one million tons of refined borates every year, fulfilling approximately 30% of the global demand.

RIO has been working on decarbonizing the Boron operation and has lowered its water use by millions of gallons through recycling. In 2022, Rio, along with Neste and Rolls-Royce (RYCEY - Free Report) conducted an initial trial of switching fossil diesel to renewable diesel in a U.S. Borax haul truck.

Rolls-Royce has been testing dump trucks powered by mtu engines using Neste MY Renewable Diesel over the past year. Neste MY Renewable Diesel is a Hydrotreated Vegetable Oil made from 100% sustainably sourced renewable raw materials such as used cooking oil and animal fat from food industry waste.

Results from the trial showed that a truck running on renewable diesel delivered similar performance and reliability as trucks running on conventional diesel. Based on this success, Rio Tinto U.S. Borax continued to work with Rolls-Royce, Neste, the Environmental Protection Agency and the State of California and completed the full transition of its heavy machinery fleet at the site to renewable diesel at the end of May 2023.

This transition includes all the heavy machinery on the property from haul trucks to loaders.  Renewable diesel will be even used in blasting. With the success of this trial, the company can replicate this model at its other mines.

Price Performance

 

Zacks Investment Research
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In the past year, shares of Rio Tinto have lost 16.8%, compared with the industry’s 20.7% decline.

Zacks Rank & Stocks to Consider

Rio Tinto currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are AngloGold Ashanti (AU - Free Report) and Gold Fields Limited (GFI - Free Report) . AU currently sports a Zacks Rank #1 (Strong Buy) while GFI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AngloGold Ashanti’s earnings per share is pegged at $1.94 for 2023. Earnings estimates have been revised 22% upward in the past 60 days. The company has gained 38% in a year.

The consensus estimate for Gold Fields’ fiscal 2023 earnings per share is pegged at $1.01. Earnings estimates have moved 6.3% north in the past 60 days. Its shares have gained 66% in the past year.

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