Rio Tinto’s CEO, Jakob Stausholm, indicated that the company is open to considering significant acquisitions in the copper sector, provided they offer substantial value. This comes as the copper market heats up, driven by increasing demand for electrification and renewable energy sources.
Currently, Rio Tinto generates most of its profits from iron ore but aims to grow its copper business by approximately 3% annually starting in 2024. Key projects include the underground Oyu Tolgoi mine in Mongolia and partnerships with Codelco in Chile and First Quantum in Peru.
The mining industry has seen speculation about large mergers, particularly after BHP withdrew from a $49 billion bid for Anglo American, which highlighted concerns about fair valuation of copper assets.
Despite copper prices peaking at over $11,000 per metric ton in May, they have since declined. Stausholm emphasized the challenges of entering a heated market, stating, “We are not prepared to pay those prices.”
Analysts suggest that Rio’s growth in copper and lithium could become a strategic focus for investors, with potential targets including Canada’s Teck Resources. However, no immediate bids are expected.
Rio Tinto reported underlying earnings of $5.8 billion for the first half of the year, slightly up from $5.7 billion the previous year, driven by gains in copper and aluminum despite falling iron ore prices. The company declared an interim dividend of $1.77 per share, consistent with last year.