In a bid to support local businesses, mining giant Rio Tinto (ASX: RIO) has engaged Matrix Composites & Engineering Ltd (ASX: MCE) to help it develop and manufacture a replacement product for structural steel components for trials at Rio Tinto’s iron ore operations in Western Australia.

Though it is a joint development agreement, Matrix will own the patent and intellectual property rights for the final product. With the help of Rio Tinto, Matrix will develop a significantly lighter weight, cost effective, corrosion-free and fully recyclable alternative product for structural steel components.

Matrix is taking advantage of its advanced composites technology expertise to create a product that is substantially lighter than steel, decreases handling risk and is more cost effective to transport than traditional alternatives. In keeping with the Company’s sustainability goals for 2023, the alternative will also be corrosion-free, and 100% recyclable. 

The patent of the product and intellectual property will be owned by Matrix, and will be readily applicable to the broader mining and resources sector where conveyor operations are utilised. There’s also a $500,000 fee payable to Matrix from Rio Tinto for the steel alternative trials. 

For designing and manufacturing, Matrix will be using its Henderson plant as it allows for mass production using automated technology derived from the aerostructures industry. The Company plans on conducting the field trials for the product’s final delivery and production by the end of FY23 at Rio Tinto’s facilities. 

A lot rests on the trial as it may determine the future of Matrix with not only Rio Tinto but also other mining companies. By teaming up with Rio Tinto, the Company has the opportunity to build a long-term business relationship with Rio Tinto.

According to Matrix Chief Executive Officer Aaron Begley, the agreement with Rio Tinto is a key step in demonstrating the potential for advanced composite solutions in the resources sector and has significant long-term potential for the Company. 

Begley detailed, “Rio Tinto has hundreds of kilometres of overhead conveyors across their WA iron ore operations, and a successful trial of our innovative product will position us to secure larger-scale contracts over the long term.” 

“This is a great example of Rio Tinto supporting local industry and Australian technology.”

He added that the new technology will have use cases beyond stainless steel. The patented, cost-effective and environmentally efficient solution Matrix is developed will also be utilised across all iron ore, alumina, nickel, gold and other hard rock mining installations. This way, Matrix will be able to access a tangible large scale market opportunity.

In FY22, Matrix’s revenue rose 64% on FY21 to $28.6 million. It expects FY23 to be even more profitable as it is already sitting atop new orders of $30 million plus recurring revenue from coating and well construction products, positioning the Company for growth.