Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 87

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 87
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 practice on scenario analysis and climate modelling evolves, we will continue to evaluate the robustness of our assessments of climate-related risks and opportunities drawing on more recently published studies and analysis.

| Annual Report on Form 20-F 2024 | 45 | riotinto.com |

Strategic report | Our approach to ESG | Climate Action Plan

Portfolio risks and opportunities in the low-carbon transition

| Impact | l | Opportunity/positive impact | l | Neutral/no or minimal impact | l | Risk/negative impact |

|                 | Short-medium term (0-10 years)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |     | Long-term (beyond 10 years)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Cross-commodity | lThe energy transition contributes to near-term demand growthacross most of our commodity portfolio, especially inConviction. Our ambition is to grow total production by ~3%per year on a copper equivalent basis from 2024 to2033.lClimate policy-related costs are rising in all regions, butconsiderably faster in OECD countries. These are likely to risequickly in Conviction, creating financial incentives toundertake decarbonisation at many of our operations. InResilience, carbon prices in developing countries increasemore slowly.lBy 2030, carbon penalties are projected to cost $0.3 billionannually, rising to $0.6 billion by 2040 assuming there is noreduction in our emissions.          |     | lRecycling and end-use efficiency improvements put downward pressure ondemand, especially in Conviction, displacing some high-cost supply in ourkey markets. This will not be enough to offset growth in demand for primarysupply.lIn Conviction, decarbonisation will become increasingly important to gain asocial licence to develop new greenfield projects and for existing operations toremain profitable. However, carbon costs will be offset by higher commodityprices, and the potential for low-carbon operations to gain a competitiveadvantage in some markets. In Aspirational Leadership, demand for transitionmaterials in the long-term offsets slightly lower demand for lower grade iron ore.                                                                                                                                                                                                                                          |
| Iron ore        | lCarbon costs are expected to rise at our Australianoperations, but they represent a small component of ouroverall costs, and will therefore only have a limited impact onour margins during this time period.lSteel producers are protected from rising carbon prices bytransitional assistance (eg Europe) or exemption mechanisms(eg China), resulting in a slower rate of transitioning to low