October 6, 2008 / 6:26 PM / 11 years ago

Rio Tinto says innovation to help with climate

BARCELONA, Spain (Reuters) - Industrial innovation and a price on carbon emissions are needed to help mining firms on a long haul toward controlling climate change, Rio Tinto chief executive Tom Albanese said on Monday.

Rio Tinto Chief Executive Officer Tom Albanese smiles during an introduction before he speaks at a lunch hosted by the Australia-Israel Chamber of Commerce in Sydney June 16, 2008. REUTERS/Tim Wimborne

The head of the world’s number two mining group, which is fighting an $88.5 billion takeover bid by bigger rival BHP Billiton, also told Reuters that recyclable aluminum was a “natural winner” in a world trying to cut use of fossil fuels.

He said top mining companies, which emit more heat-trapping carbon dioxide than some countries and are sometimes criticized for their environmental records, had to do more to help slow global warming by curbing use of fossil fuels.

“We’ve got to do more than just make sure that the lights get turned off at the end of every shift,” he said on the sidelines of an October 5-14 congress of the International Union for Conservation of Nature.

“We’ve got to look at where the big engines of energy consumption are going to be,” he said.

“Ultimately I believe that innovation and incentives around innovation will be a key part of the global solution on carbon. Carbon will not be a 3-5 year solution, it will be a 30-50 year solution,” he told Reuters in Barcelona.

“But we do need on day one to change the trajectory,” he said. Innovation could range from better mine layouts to new technologies for lower energy use in smelting or crushing rocks.

“For carbon, we do believe that the world is and should be moving toward carbon pricing, but it should be more globalized,” he said. Climate change could cause more heatwaves, floods, droughts and higher sea levels, the U.N. Climate Panel says.

TRADING

The European Union opened the first carbon market in 2005, issuing carbon emissions permits to industries — if they overshoot limits they have to buy permits and can sell surpluses if they undershoot.

“I think carbon trading will be part of the solution, but it will not necessarily be the primary solution,” Albanese said, adding that trading of carbon credits was merely a step toward the broader goal of reducing emissions.

Rio Tinto and its Alcan aluminum unit emitted about 56 million tons of carbon dioxide in 2007 — roughly the emissions of a country such as Switzerland or Ireland.

He said that Rio was still committed to environmental projects, such as a “clean coal” venture with BP. But he said the credit crunch did not help world environmental efforts.

“Environmental concerns are something best approached during conditions of a strong economy, versus a weak economy,” he said.

In world talks on a new U.N. environmental treaty, Japan has suggested setting global benchmarks, for instance, for the amount of energy or carbon emissions it takes to produce a ton of steel, aluminum or cement.

“That would be something that would favor Rio Tinto,” Albanese said, saying Rio was more efficient than many peers.

“We believe that aluminum will be a natural winner,” he said. Aluminum production is energy intensive but the metal is lightweight, helping cars cut emissions, and can be recycled.

He also said Rio was disappointed by a decision by Norway’s finance ministry to boycott shares in Rio Tinto as part of its $335 billion “oil fund.” Oslo said last month that operations at the Grasberg mine in Indonesia were damaging the environment.

“I’ve expressed my disappointment and surprise with the Norwegian government’s decision ... I do believe that Rio Tinto has had a positive effect” on the project, led by Freeport McMoRan, he said.

-- For Reuters latest environment blogs click on: blogs.reuters.com/environment/

Editing by Hans Peters

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