The next industrial revolution Rio Tinto expands green RD

Rio Tinto will accelerate its shift into battery minerals by expanding its research and development arm, which has been key to its plans to invest $2.4 billion in a lithium mine in Serbia.

Rio’s commitment to the Jadar mine in Serbia, which is home to one of the world’s largest lithium deposits, was made possible after a group of researchers and engineers at the miner’s Melbourne development hub, solved how to process the mineral Jadarite and extract lithium carbonite from the ore. Jadariteis a rare mineral and its existence at the Jadar mine is the only known occurrence of this mineral globally.

The lithium mine is part of Rio Tinto’s shift into minerals powering the green energy revolution, and follows the company’s exit of its coal assets in the past few years.

Last week, Rio Tinto reported a record first-half profit of $US12.1 billion, driven by surging iron ore prices. However, the company warned that Chinese demand for iron ore has potentially peaked, although hedge funds have continued to plough money into commodities expecting that this year’s rally in raw material prices still has further to run.

Rio Tinto derives more than 80 per cent of its profits from its iron ore division, which has driven its success, but analysts also see its overexposure to the commodity as a risk and the company is attempting to broaden its earnings base. Labour shortages and higher operating costs than its rivals are also near term challenges that Rio Tinto must address.

Last week, the company stunned investors when it announced it would pay $US9.1 billion in dividends.

Mr Mark Davies, Rio’s group executive of safety, technical and projects, said the company expected to increase the $200 million it spends annually on research and development because of the demand for green energy innovation, which he said was “probably going to be the next Industrial Revolution”. He didn’t quantify the amount by which that spending would increase.

The Jadar mine could supply enough lithium to power one million electric vehicles annually. When it’s fully operational in 2029, it’s expected to produce 58,000 tonnes of lithium carbonate as well as 160,000 tonnes of boric acid, which is used in the making of the glass for flatscreen TVs and smartphones, and 255,000 tonnes of sodium sulphate, which is used to manufacture detergent.

Rio Tinto has still to secure final government permits for construction work on the Jadar mine. The project has been the subject of opposition in Serbia because of concerns about its proximity to heritage sites as well as the environmental risks.

Jared Osborne, general manager of Rio Tinto’s laboratory in Melbourne that worked out how to process Jaradite, holds a lump of the rare mineral. Credit:Wayne Taylor

Rio Tinto’s minerals chief executive Sinead Kaufman said the team at its Melbourne research and development centre were focused on minimising the environmental footprint of the Jadar mine, and had worked on models for water management at the plant and the “dry stack tailings”, a more sustainable approach to compacting the materials left over after a mineral is mined.

Ms Kaufman said Rio Tinto had begun sharing details of its environmental impact assessments with scientists and engaging the Serbian community.

The company is also reviewing initial feedback on its environmental scoping documents. “At this point, we’re not seeing anything [that] we don’t believe we can work through,” Ms Kaufman said.

If the project receives all the necessary permits then the first export from the mine is expected by 2026, and it would position Rio Tinto as one of the top ten lithium producers in the world.

Emma Koehn reports on healthcare companies for The Age and The Sydney Morning Herald. She is based in Melbourne.

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