The project in Western Australia's Pilbara district comes as part of Rio's $3 billion plan to decarbonise its iron ore business. It is the first for Yindjibarndi Energy, a partnership between the Yindjibarndi Aboriginal Corporation and a ACEN Corp (ACEN.PS), the listed energy platform of the Ayala Group.
The deal comes as Australia's Indigenous groups are taking equity stakes in the growing renewable energy industry, and as ACEN grows its footstep outside its home base in Southeast Asia.
As a first step, the group is looking to build a 75-100 megawatt solar array, for which an investment decision will be due by the end of next year. Construction is expected to take 12-18 months.
"This arrangement would see renewable power on Yindjibarndi connecting to our private network," Simon Trott, Rio Tinto's iron ore division chief, told media in Port Dampier.
In its second phase, the group will look at battery power and wind projects, which Yindjibarndi Energy plans to supply the region. Rio has already identified some potential locations for wind to supplement its renewable energy network during the night.
Rio Tinto, which accounts for 1% of global emissions mostly due to the steel-making emissions of its customers, is looking to build 600-700 megawats of solar power to displace gas as part of its decarbonisation of its iron ore business.
It is targeting a 50% reduction in scope 1 and 2 emissions by 2030 from a 2018 baseline of 32.6 million tonnes of CO2 equivalent. Rio has walked back an initial target of a 15% reduction in emissions by 2025 and its targets are behind peer Fortescue, which plans to reach net zero scope 3 emissions by 2040.
The green energy developments allow YAC to take into account cultural heritage sites, river systems, water ways and other important places when they are choosing renewable sites, said YAC CEO Michael Woodley.
Western Australia's Yindjibarndi Aboriginal Corporation struck a deal with ACEN in July to develop up to 3 gigawatts of renewable energy, giving YAC a 25%-50% stake in projects developed on their native title land and preference to community businesses for contracts.
Aboriginal groups have so far had limited say in mega-projects rolled out across Indigenous lands. Some have at times eroded or destroyed traditional landscapes, including the demolition by Rio Tinto of sacred rock shelters at Juukan Gorge three years ago.
"It’s about taking respectful use of Yindjibarndi country and providing green electrons to the community, to Rio Tinto, to other business, primarily to help with Pilbara decarbonisation then electrification," said Yindjibarndi Energy CEO Craig Ricato.
