‘Not taken hold’: Rio Tinto chief Jakob Stausholm says West’s industrial push too slow

Rio Tinto boss Jakob Stausholm has warned the push to reindustrialise the West is yet to take hold and that the mining giant also hasn’t “yet seen” any increase in output following the US Inflation Reduction Act.

Mr Stausholm kicked off the London Metals Exchange 2024 seminar overnight, where he also told attendees the US and the EU were not moving quickly enough to electrify and slash emissions.

He specifically called out the Inflation Reduction Act — a massive push to plough hundreds of millions of dollars into “clean energy” projects — as one of the most notable examples of a Western industrial shift to create jobs and boost energy security.

“While it’s still too early to tell what the outcome of policies like the IRA will be, we haven’t yet seen any significant increase in output. There is currently not enough evidence to suggest Western re-industrialisation has taken hold,” he said.

Locally, it comes as the US Government’s Department of Energy dishes out a combined $500 million in grants to listed global miner South32 and Osborne Park explorer Element 25 to start building a pipeline of manganese supplies.

China’s dominance in refining minerals needed in the critical arenas of defence and energy has spurred Western countries to start becoming more self-reliant.

“In the US, there has also been a surge in manufacturing construction spending. However, since the 2022 Chips Act, most of this investment has been concentrated in semiconductors,” Mr Stausholm said.

“Meanwhile, the reality is that China – and increasingly other Asian economies – are continuing to strengthen their competitive position and outpace the rest of the world.”

On decarbonisation, the mining boss said the transition away from fossil fuels to electrified power was “a very physical” one requiring new infrastructure and and transition lines.

But securing permissions and the huge swathes of land needed for renewable energy projects and storage remained difficult.

“This is another challenge for companies such as ours who are heavily reliant on the grid,” he said.

“Most of the world is not moving quick enough to electrify. In the US and Europe electricity generation has hardly grown. Meanwhile, China increasingly looks like an outlier. Its electricity share of final energy consumption has shot up over the past two decades, as has the share generated from renewable sources.”

In February Rio signed Australia’s biggest power deal with the Queensland government for 1.4GW of renewable energy from the planned Bungaban windfarm to power the miner’s energy intensive aluminum and alumina operations.