Why is the Rio Tinto share price marching higher again today?

ESG focused investors will likely applaud Rio Tinto's new investment plans in the Pilbara.

Key points
  • The Rio Tinto share price is in the green today
  • Iron ore prices gained again overnight, up 2.4%
  • The ASX 200 miner announced a $600 million renewable energy investment plan

The Rio Tinto Ltd (ASX: RIO) share price is treading higher again in morning trade on Wednesday.

After closing up 3.5% yesterday, shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner are up 0.2% at the time of writing to $108.05 per share.

Materials shares are broadly outperforming today, with the S&P/ASX 200 Materials Index (ASX: XMJ) up 0.68% while the ASX 200 is down 0.41%.

Here's what's moving the Rio Tinto share price today.

A smiling miner with a green hard hat stands in front of a piece of heavy mining equipment.

Image source: Getty Images

What are ASX 200 investors considering?

The Rio Tinto share price is in the green on the back of another leg up for iron ore prices.

The industrial metal broke back above the US$100 mark yesterday and gained another 2.4% overnight to US$101.25 per tonne. That's the highest price in more than two months amid new Chinese government stimulus for the nation's property markets.

The Rio Tinto share price also enjoyed a big gain in US markets, with the stock closing up 4.0% on the NYSE.

In other news likely to draw the interest of ESG-focused investors, the miner announced it will invest another $600 million in renewable energy assets in the Pilbara. The new investment is part of Rio's ongoing effort to decarbonise its Western Australian iron ore operations.

Rio Tinto intends to construct two 100MW solar power facilities and 200MWh of on-grid battery storage by 2026.

Commenting on the new renewable energy investments, Rio Tinto Iron Ore CEO Simon Trott said:

The Pilbara is extremely well-positioned to take advantage of renewable power with land, access to people, and abundant wind and solar resources. Our Pilbara electricity grid is the largest privately-owned grid in Australia, ensuring that we have the initial infrastructure required to enable a transition to renewable energy.

We expect to invest around $3 billion to install renewable energy assets as well as transmission and storage upgrades in the Pilbara as part of our commitment to halve our emissions from the Pilbara by the end of this decade.

Rio Tinto share price snapshot

The Rio Tinto share price is up 16% over the past 12 months. That compares to a flat full-year performance of the ASX 200 Index.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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