Rio Tinto (ASX:RIO) is looking to become “stronger, sharper, simpler” in the wake of the $240 billion Glencore merger collapse, with chief Simon Trott guiding the company towards a tighter metals focus − especially copper.
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The Australian mining heavyweight will strip back to its core focus on iron ore, copper, and industrial metals (that’s aluminium and lithium, mostly).
Iron ore already did much of the heavy lifting in the company’s latest first-half report, where Rio told shareholders net profits had fallen 14%, to US$9.97 billion, in what was the global miner’s worst results since CY20.
That half-decade low is likely why Mr Trott is wielding his tight new strategy like a shield. “Our solid financial results demonstrate clear progress as we embed our stronger, sharper, simpler way of working,” he declared Thursday.
But copper is the future, whether iron ore is doing best right now or not, the company chief has repetitively said − especially considering the cost of mining iron ore Down Under may increase by another 6% in CY26 alone.
Rio Tinto “put copper front and centre” with recent moves, with 85% of the company’s exploration budget now centralised on the precious red metal.
Oyu Tolgoi has become a “main driver,” Trott added in an update in Week 8. That, along with Rio’s lithium forays and the slow-starting Simandou, make up the cornerstones Rio will lean most heavily on into the future.
Maybe the only thing that may worry Rio shareholders is the fact the seemingly bullish Trott stayed cagey on timelines. The company’s arch-rival, BHP (ASX:BHP), raked in 51% of group profits from copper, marking the first time iron ore had come second. Trott refused to say when Rio could boast the same.
It should pay dividends eventually, though (and on that note, Rio will be handing out a US$4.02 divvy), with copper prices already up ~55% these last two years.
Also in Rio’s bumper February update, and away from all the copper posturing, was a full stop on the headlining Glencore deal: Trott said talks had been “very constructive,” but ended up amounting to little.
That’s not to say Rio’s brass is totally ruling out any M&As; they just have to suit the strategy. “Who knows what the future brings?” Trott said. “If another opportunity comes to us where we can create a big mega-major miner, on the right conditions for our shareholders, we would look at that.”
RIO heads into Friday down -0.15% for the week.
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