Rio Tinto (ASX:RIO) shares reached a new peak today, boosted by rising copper and iron ore prices that have raised bullish sentiment in Aussie miners.
Rio’s shares closed at A$140.58, for a 3.92% increase on the day, marking a new high for the stock. BHP Group (ASX:BHP) also experienced a surge, hitting a high of A$44.60 before settling slightly lower to close at A$44.50, up 3.58% on the day.
At its recent strategy day, Rio Tinto outlined plans to streamline operations through divestments and productivity improvements. The company aims to generate $5–$10 billion through asset sales, including its titanium and borates businesses. Cost-cutting measures are projected to reduce unit costs by 4% between 2024 and 2030, with $370 million of the targeted $650 million in annual productivity gains already achieved. A key focus is expanding copper production, with a target of 1 million tons per year by 2030. This includes a ramp-up at the Oyu Tolgoi project in Mongolia, expected to boost copper output significantly in the coming years.
Rio Tinto is also addressing shareholding constraints with its largest shareholder, Chinalco. The company is exploring an asset-for-equity swap to potentially reduce Chinalco’s stake and restore Rio Tinto’s flexibility to conduct share buybacks, which are currently limited by a 14.99% ownership cap on the company’s London-listed shares imposed by Australian regulators in 2008.
JPMorgan recently raised its price target on Rio Tinto’s London listed shares to GBP61.70 from GBP54.50, reflecting a ~18% upside from here, and maintaining an Overweight rating. The investment bank anticipates Rio Tinto will “pro-actively execute shareholder value creation” in 2025-26.
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The company’s most recent earnings report revealed a first-half underlying profit of $4.81 billion, the smallest since 2020, reflecting lower iron ore prices and increased costs at the time. Despite this, the company continued to reward shareholders when issuing a $1.48 per share interim dividend.
