(Yicai Global) June 13 -- China Baowu Steel Group, the world's largest steelmaker by sales, and international mining giant Rio Tinto signed a non-binding agreement to expand the scope of their cooperation to help decarbonize the steel value chain.

The pair plan to jointly develop specific decarbonisation projects, Rio Tinto said yesterday, citing the memorandum of understanding signed in Shanghai on the same day.

The projects include building a pilot-scale electric melter at one of Baowu’s steel mills in China to enable low-carbon steelmaking, optimizing pelletization technology for Australian ores, expanding the development of Baowu's hydrogen-enriched carbon cycle and oxygen furnace technology that can mitigate carbon emissions, and studying opportunities for producing low-carbon iron in Western Australia.

“Rio Tinto and Baowu are united in a commitment to accelerating the delivery of low-carbon solutions for the entire steel value chain,” said Alf Barrio, Rio Tinto's chief commercial officer.

“This MoU aims to address one of the biggest challenges faced by the industry -- developing a low-carbon pathway for low-to-medium grade iron ores, which account for the vast majority of global iron ore supply,” he added.

Rio Tinto and Baowu have been partners for nearly 50 years. Last September, they invested USD2 billion in a joint venture to mine iron ore in Western Australia. In December 2020, Rio Tinto announced it would spend USD10 million to cooperate with Baowu on low-carbon iron production and related research over the next two years, and the pair also signed an MoU on climate change with Tsinghua University in September 2019.

“With the mission of building an industrial ecosystem to promote the progress of human civilization, Baowu is committed to working with Rio Tinto to jointly study and provide low-carbon and green comprehensive solutions for the steel value chain, help the low-carbon transformation and upgrade of the steel industry chain, and support the world to address the challenge of climate change with pragmatic actions,” the Shanghai-based steelmaker said.

Rio Tinto also signed a deal with China's Sichuan University on June 5 to conduct innovative research on carbon mineralization techniques that would enable the London-based firm to reduce its carbon footprint and solid waste disposal.

Baowu has been the world's largest steelmaker for three consecutive years. Last year, it produced 132 million metric tons of crude steel and made a CNY31.3 billion (USD4.4 billion) profit on revenue of CNY1.2 trillion (USD167.9 billion), according to its latest figures.

Editor: Futura Costaglione