Global miner Rio Tinto’s announcement that it will spend $1-billion to reach net zero emissions by 2050 has been hailed as a “small, but significant step in the right direction”, however Wood Mackenzie vice chairperson of metals and mining Julian Kettle said on Wednesday that the iron-ore major had to do more.

“Changes need to be far bolder at a corporate, government and societal level,” he said in response to the Rio Tinto announcement, in which the diversified miner set new emission reduction targets for 2030.

"Setting Rio Tinto’s $1-billion in context, this represents just 16% of the dividend it distributed in 2019 or just under 5% of its reported earnings before interest, tax, depreciation and amortisation of $21.2-billion for the same year.

"Put another way, on a 100% basis, Rio Tinto reported iron-ore production of 327-million tonnes in 2019. A $1-billion dollar green investment, while laudable, could be funded by a 30c/t rise in the iron-ore price. The industry needs to do much more.

"Having said this, miners are caught between a rock and a hard place. The coronavirus, falling prices and the spectre of oversupply across most mined commodities are issues that are not conducive to a massive expansion of capex or expenditure that will take years to provide a ‘green dividend’,” said Kettle.

Rio Tinto’s new targets for 2030 are a further 30% reduction in emissions intensity from 2018 levels and a further 15% reduction in absolute emissions from 2018 levels. Under these targets, Rio Tinto said its overall growth between now and 2030 would be carbon neutral.

“Climate change is a global challenge and will require action across nations, across industries and by society at large. New technologies, partnerships and effective government policies will be key in achieving this goal, but today there is no clear pathway for the world to get to net zero emissions by 2050.

“The ambition is clear but the pathway is not and the challenge for the world, and for the resources industry, is to continue the focus on poverty reduction and wealth creation, while delivering climate action. This will require complex trade-offs which means we all need to face up to some challenging decisions and have an honest conversation,” said Rio Tinto CEO Jean-Sebastien Jacques.

He added that setting achievable targets for 2030 and 2050 committed the group to being part of the solution.