(RIO) Rio Tinto - Ratings and Ratios

Rio Tinto Group (NYSE: RIO) is a London-headquartered diversified miner that explores, extracts, and processes a broad portfolio of mineral resources worldwide. Its operations are organized into four primary segments: Iron Ore, Aluminium, Copper, and Minerals.

**Iron Ore** – Concentrated in Western Australia, the segment produces bulk-grade iron ore, as well as salt and gypsum. In FY 2023 the unit delivered ≈ 340 Mt of iron ore, and its profitability is tightly linked to global steel-making demand and the price of iron ore, which averaged US$115 per tonne in Q2 2024 after a 12 % YoY rise.

**Aluminium** – Encompasses the full value chain from bauxite mining to alumina refining, primary smelting, and recycling. The segment shipped ≈ 12 Mt of aluminium in 2023, and its margins are increasingly driven by the spread between aluminium prices (≈ US$2,300 per tonne in early 2024) and energy costs, given the energy-intensive nature of smelting.

**Copper** – Includes mining and refining of copper along with by-products such as gold, silver, and molybdenum. Production reached ≈ 1.7 Mt of copper in 2023, and the segment benefits from the structural demand uplift associated with renewable-energy infrastructure, electric-vehicle batteries, and grid modernization, which together underpin a multi-year copper deficit forecast by the International Copper Study Group.

**Minerals** – Covers borates, titanium-dioxide feedstock, iron concentrate and pellets, diamond mining, and emerging battery-materials projects (notably lithium). The segment’s lithium development in Western Australia targets a ≈ 30 kt Li₂CO₃-equivalent output by 2027, aligning with the projected > 30 % CAGR in global lithium demand through 2030.

Operationally, Rio Tinto owns and runs a mix of open-pit and underground mines, integrated refineries, smelters, processing plants, and associated logistics (power generation and shipping). The company reported FY 2023 EBITDA of US$31 bn and a free-cash-flow conversion of ≈ 70 %, supporting a US$15 bn capex plan focused on expanding copper and lithium capacity.

Key macro drivers for Rio Tinto include global infrastructure spending (which fuels iron-ore demand), the energy transition (boosting copper and lithium), and aluminium’s recycling loop, which can mitigate exposure to volatile electricity prices.

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