With companies such as Ford, Volvo and now Mercedes-Benz looking at green steel as an alternative for making vehicles, players in this heavy industry want to improve their processing and manufacturing methods.

With a 7-9% share of the world's total carbon footprint, steelmaking is one of the industries that are the hardest to transition to a green economy, which is why innovative solutions and collaboration are essential, writes ESG Today.

Rio Tinto’s Chief Commercial Officer Alf Barrios said that "Rio Tinto and China Baowu are united in a commitment to accelerating the delivery of low-carbon solutions for the entire steel value chain. This MoU aims to address one of the biggest challenges faced by the industry – developing a low-carbon pathway for low-to-medium grade iron ores, which account for the vast majority of global iron ore supply."

For the new partnership, the two companies will initiate a series of pilot projects in Australia and China. For example, Baowu will use electricity-based melters at one of its facilities in China, processing low and medium grade ore without the use of fossil fuels.

Back in 2022, Rio Tinto and Baowu collaborated in a 2 billion USD project to build an iron ore project in Pilbara, Western Australia.