In key news on Australian stocks, Rio Tinto Limited (AU:RIO) and BHP Group Limited (AU:BHP) announced a partnership for the testing of large battery-electric haul trucks in Pilbara, Western Australia. The trials will be conducted to evaluate the performance and productivity of these trucks in the Pilbara environment, marking it as the first in the industry. This partnership will further advance both companies’ shared goal of achieving net zero operational greenhouse gas emissions by 2050.
BHP shares gained 1.14% on the ASX today, while RIO stock was down by 0.61%.
BHP is a multinational mining company, producing diverse commodities like iron ore, coal, copper, nickel, and a variety of other minerals. Meanwhile, Rio Tinto is a British-Australian mining firm with a major focus on iron ore.
Rio Tinto and BHP’s Collaboration
As per Rio’s statement, the two companies will collaborate with equipment manufacturers Caterpillar (NYSE:CAT) and Komatsu (DE:KOMA) to conduct independent trials of their battery-electric haul trucks.
As part of the collaboration, BHP will test the Caterpillar trucks, while Rio Tinto will evaluate the Komatsu trucks, with the findings shared between both companies. The trials will begin in the second half of 2024 with two Cat 793 haul trucks, followed by the testing of two Komatsu 930 haul trucks starting in 2026 at mining sites in Pilbara. The individual testing will guide the strategy for testing more haul trucks and possibly deploying electric truck fleets for both companies.
With such a collaboration, both companies will move forward in their goal to decarbonise their operations, edging towards net-zero commitments.
In 2023, Rio’s carbon emissions from diesel consumption in its mining equipment and rail fleet comprised 12% of Scope 1 and 2 emissions. Meanwhile, for BHP, carbon emissions from diesel combustion made up approximately 40% of the company’s Scope 1 and 2 emissions in FY20.
Are Rio Tinto Shares a Good Buy?
According to TipRanks’ consensus, RIO stock has been assigned a Moderate Buy rating, backed by 12 recommendations. The Rio share price target is AU$133.20, which is 1.34% above the current trading price.
