Rio Tinto (RIO) and China Baowu conclude trials, paving way for lower-carbon steel production
Rio Tinto and China Baowu have concluded industrial-scale trials in China, demonstrating a potential pathway for lower-carbon steel production. The initiative focused on reducing steelmaking emissions through the use of Rio Tinto's Pilbara Blend iron ore for pelletisation and direct reduction.
The trials, conducted at China Baowu's Baoshan Iron & Steel Zhanjiang Steel Operations, successfully produced direct reduced iron (DRI) from pellets containing one-third of Rio Tinto's Pilbara Blend ore. A hydrogen-based shaft furnace was employed, with the resulting DRI subsequently converted into steel. This process highlights a method for utilising typical mid-grade ores from Western Australia's Pilbara region in decarbonisation efforts.
On 12 June 2026, shares in Rio Tinto are trading at 7,732p, up 1.8% from yesterday's close of 7,594p. The positive movement follows a week that included a downgrade by RBC Capital on 9 June 2026.
Why Rio Tinto's Green Steel Trials Matter
Rio Tinto is a global mining powerhouse, primarily known for extracting vast quantities of iron ore, a fundamental ingredient for steelmaking. Beyond iron ore, they also mine copper, aluminium, and other industrial minerals. Their core business involves digging these raw materials out of the ground and selling them to industrial customers worldwide, particularly steel producers and manufacturers, which forms the bedrock of their revenue.
Today's positive movement stems from the successful industrial-scale trials Rio Tinto conducted with China Baowu, a major steel producer. These trials demonstrated a viable pathway to significantly lower-carbon steel production by using Rio Tinto's Pilbara Blend iron ore. By producing direct reduced iron (DRI) from pellets containing their ore in a hydrogen-based shaft furnace, they've shown that even typical mid-grade ores from Western Australia can be integrated into future decarbonisation efforts for steel. This is a crucial development for the long-term demand for their primary product, especially following a week that included a downgrade by RBC Capital on 9 June 2026.
The market has responded to this forward-looking news, with Rio Tinto shares currently trading at 7,732p, marking a 1.8% increase from yesterday's close of 7,594p. This indicates investor confidence in the company's proactive steps to adapt its core offering to meet evolving environmental standards.
Consider a long-established energy company that has historically relied on fossil fuels. As the world shifts towards renewable energy, instead of watching demand for their product dwindle, they successfully develop a new, efficient technology that allows their existing infrastructure to produce clean hydrogen. This innovation doesn't just keep them in the game; it redefines their relevance and secures a future for their core business in a changing landscape.
Rio Tinto
Rio Tinto Group (RIO) operates globally in the exploration, extraction, and processing of diverse mineral resources. Its extensive portfolio encompasses commodities such as aluminium, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and lithium. The company's operations span a wide range of infrastructure, including open-pit and underground mines, milling facilities, refineries, smelters, power generation assets, and dedicated research and service centres. Established in 1873, this industrial materials giant maintains its headquarters in London, United Kingdom.