https://newsletter.mw.creamermedia.com
Aluminium|Business|Copper|electrification|Energy|Flow|Iron Ore|Mining|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Resources|Solar|Steel|Underground|Flow|Products
Aluminium|Business|Copper|electrification|Energy|Flow|Iron Ore|Mining|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Resources|Solar|Steel|Underground|Flow|Products
aluminium|business|copper|electrification|energy|flow-company|iron-ore|mining|power|project|projects|renewable-energy|renewable-energy-company|resources|solar|steel|underground|flow-industry-term|products

Rio Tinto open to big copper buys but cautious of overheated market

Rio Tinto CEO Jakob Stausholm

Rio Tinto CEO Jakob Stausholm

31st July 2024

By: Reuters

  

Font size: - +

MELBOURNE - Rio Tinto may consider a large acquisition but it would have to provide value that is hard to find amid a copper market that is running hot, CEO Jakob Stausholm said on Wednesday while discussing its first-half results.

Rio derives most of its profits from iron ore but is increasingly focused on copper growth where it expects growth of 3% a year from 2024 onward. That will come from existing projects, mainly the underground Oyu Tolgoi mine in Mongolia but also ventures with Codelco in Chile and First Quantum in Peru.

Speculation over large scale mergers in the mining sector has ramped up since BHP walked away from a $49-billion plan to take over rival Anglo American in May. Anglo said the offer did not adequately value its long-term copper holdings.

Future copper demand is expected to surge to meet electrification needs as part of the transition to renewable energy sources and electric vehicles. Copper prices climbed to a record of over $11 000 a metric ton in May but have since declined.

"There's definitely the opportunity to grow further ... We are constantly looking for other opportunities," Stausholm said on a media call for its earnings release, referring to the outlook for its copper business.

"On the other hand, it is a bit of a heated market, so that's not an easy market to just buy yourself into. While we are looking we are also saying, we are not prepared to pay those prices."

Analysts at Macquarie previously said they expect Rio's copper and lithium growth to become "an emerging strategic focus" for investors. Rio's takeover list includes Canada's Teck Resources, but a bid was not imminent, a source told Reuters earlier this month.

Earlier on Wednesday, Rio reported half-year underlying earnings growth in line with market estimates as gains in its copper and aluminium businesses were offset by lower prices for iron ore. Shares were up 0.6% at A$115.39.

Iron ore prices tumbled about 15% in the first-half because of the Chinese property crisis but Rio Tinto said the outlook there should support solid commodities demand.

"We see the Chinese economy growing plus or minus 5% and that is very good for commodity markets. You also see the US growing. Not fantastic, but absolutely underpinning good markets and good demand for our products," Stausholm said.

The world's largest iron ore producer reported underlying earnings of $5.8-billion for the six months ended June 30, compared with $5.7-billion a year ago and in line with a Visible Alpha consensus of $5.8-billion.

Stausholm cited the "enormous" impact of China's green transition on steel demand, for solar cells and the expansion of wind power and electric vehicles, which he also expects to feed into higher consumption of high-grade iron ore.

That will benefit customers as its high-grade iron-ore Simandou project in Guinea starts production late next year, Stausholm said.

The miner declared an interim dividend of $1.77 per share, in line with last year's payout, and below consensus estimates of $1.81 apiece.

Rio Tinto's net debt was $5.1-billion, around the higher end of analyst estimates, while its free cash flow was in line at $2.8-billion.

It expects capital investment at Simandou to accelerate in the second half from $3.7-billion in the first half.

Edited by Reuters

Comments

Showroom

Condra Cranes
Condra Cranes

ISO-certified Condra manufactures overhead cranes, portal cranes, cantilever cranes and crane components: hoists, drives, end-carriages, brakes and...

VISIT SHOWROOM 
Aqs image
AQS Liquid Transfer

AxFlow AQS Liquid Transfer (Pty) Ltd is an Importer and Distributor of Pumps in Southern Africa

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 06 December 2024
Magazine round up | 06 December 2024
6th December 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.151 0.226s - 150pq - 2rq
Subscribe Now