By Clara Denina and Melanie Burton
London — Rio Tinto CEO Simon Trott outlined a plan on Thursday to generate $5bn-$10bn through divestments and productivity growth as he moves to simplify the structure of the world’s largest iron ore miner.
Investors had been waiting for the details since Rio Tinto announced in August that it would streamline its business to three core units from four and focus on profitable assets. Assets for sale include the group’s titanium and borates businesses.
Rio Tinto joins global peers in efforts to become leaner and more focused by selling noncore assets, cutting jobs and tightening capital to boost investor appeal amid shifting commodity cycles and pressure for higher returns.
Thorough review
The Anglo-Australian miner identified some global assets it no longer needs after a thorough review, Trott said on a telephone call on the company’s strategy day.
“We’ll proceed and test the market for [titanium and borates] assets, together with some of the other measures across our footprint: things like land, infrastructure, processing assets, and mining assets ... so we’re reaching up to $10 billion,” he said.
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Trott told shareholders on Thursday the miner is working with its main shareholder, Aluminium Corporation of China Limited (Chinalco), to resolve governance constraints that limit its ability to buy back shares.
Rio Tinto said it is also exploring commercial partnership options for some of the assets and plans to cut unit costs by 4% from 2024 to 2030.
It announced $650m in annualised productivity gains and cost savings, with $370m already realised and the rest to be delivered in the first quarter.
The figure included job cuts, Trott added, but declined to specify the number.
The company’s shares opened more than 2% higher in London after his remarks before paring the gains, with some analysts expecting more.
“Headline cost out of $650m [is] a little disappointing,” said Glyn Lawcock, an analyst at Barrenjoey.
However, analysts at Citi were more optimistic. “Rio … has laid out an attractive vision for the company, with positive guidance commentary for 2025 and 2026, reiterating the solid volume growth outlook by 2030 and capex normalisation,” they said.
Earnings could be boosted by as much as half by the end of the decade, Rio added, thanks to capital discipline, rising prices for its commodities and 20% growth in copper production.
Higher copper forecast
The miner also raised its 2025 copper production forecast, citing improved operations at its Oyu Tolgoi project in Mongolia.
Rio now expects copper production this year of between 860,000 tonnes and 875,000 tonnes on a consolidated basis, up from its previous forecast of between 780,000 tonnes and 850,000 tonnes. In 2026, it expects copper production of between 800,000 tonnes and 870,000 tonnes.
Rio earns profits primarily from iron ore, but it is shifting focus towards copper, aiming to produce 1-million tonnes of the metal annually by 2030.
Copper prices are at records, and the commodity is expected to be in high demand as the world adopts greener forms of energy.
Rio said it remains on track to boost copper output at Oyu Tolgoi by more than 50% this year and by about 15% in 2026.
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