Rio Tinto's New Green Route To The West Via India

In the high-emissions world of industrial metals, low carbon is the new currency. 

Rio Tinto’s return to India after a decade-long absence signals more than just another market entry. The world's second-largest miner is plotting a calculated move in the global chess game of industrial metals, where low-carbon credentials are fast becoming as valuable as the metals themselves. 

Project consultants estimate Rio Tinto could invest up to $7 billion to build a greenfield plant in India, which could become the world's largest renewable-powered aluminium plant. Without mentioning specifics, the company said it was studying the possibility of building up to 1 million tonnes per annum of primary aluminium capacity and 2 million tonnes of alumina. In partnership with AMG M&M and clean energy provider Greenko, the facility would be powered by 2 GW of solar and wind, backed by pumped hydropower storage, and designed from scratch for carbon efficiency. 

But it isn't just about building a smelter in a growing market. It is a statement of intent: Rio knows Western buyers want Indian-made products without the carbon baggage. 

Green Market Reality
The economics behind this move are compelling. As European Carbon Border taxes loom in 2026 and companies from Apple to Audi hunt for verified low-carbon metals to scour their supply chains, Rio is positioning itself to capture the premium segments that will emerge. 

Aluminium sits at the heart of the green transition paradox—essential for EVs, solar farms, and transmission lines, yet notoriously dirty to produce unless powered by renewables. Rio Tinto aims to solve that contradiction by supplying green metal in a brown industry on an industrial scale.

While India offers abundant bauxite mines, competitive labour, and government incentives for green manufacturing, Rio Tinto's strategy is more forward-looking. The company anticipates Western buyers will shift production to India while still requiring products that meet the stringent environmental standards back home.

As Rio Tinto's Aluminium Chief Executive Jérôme Pécresse said in the release, this study represents an “important step in our ambition to grow our global, low-carbon aluminium footprint while exploring new project delivery approaches and opportunities in emerging markets." Translation: Rio is establishing a beachhead in India to supply Western customers, not merely to serve local demand. 

Local Competition 
It’s not that Indian companies like Vedanta and Hindalco Industries are standing still. They are just not under any pressure to speed up decarbonisation given more than enough local demand that is price-sensitive rather than green-conscious.

Vedanta has reduced emissions intensity to 17.6 tonnes of carbon dioxide per tonne of aluminium, down from 19.3, while promoting its "Restora" low-carbon brand. Hindalco has cut its carbon intensity by nearly 20% since 2012 and partnered with Greenko on hybrid renewables.

However, both companies remain limited by India's coal-heavy grid and the economics of serving a domestic market where price often trumps sustainability credentials. Neither is positioned to produce aluminium that can bypass European carbon border taxes or command ESG premiums in Western markets.

India already produces more aluminium than it consumes. But in the new ESG-driven marketplace, provenance matters as much as price. While Indian companies retrofit existing operations, Rio Tinto is building green from the ground up—with verified renewable power designed for origin traceability. 

It is aimed at export markets where carbon credentials translate to pricing power. Rather than simply chasing growing local demand, Rio is establishing an export platform where India’s manufacturing advantages can be paired with Western environmental expectations. 

If successful, Rio could create a two-tier market: premium-priced green aluminium for carbon-conscious buyers, while local producers continue serving price-sensitive segments. The project also reveals how mining majors are responding to shifting capital flows, as ESG-focussed funds increasingly dictate investment patterns. 

Rio Tinto is betting that Western buyers sourcing from India will pay more for green credentials, and it's getting ready to meet that demand before local players can fully transition.