Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) has told investors it is entering a “new chapter”, promising tighter discipline, stronger productivity and a simpler structure as it seeks to deliver what it calls industry-leading returns.
At its Capital Markets Day, the miner said it would streamline itself around three core businesses (iron ore, copper and aluminium and lithium) with a focus on safety, reliability and “best in class” knowledge of its ore bodies.
The idea is to make the group easier to run and better able to turn investment into production growth.
Simon Trott, chief executive, said: “We are building from a position of strength for Rio Tinto’s next chapter, sharpening and simplifying the business to deliver leading returns.”
He said Rio was already seeing “strong early productivity benefits and cost savings with more to come”, adding that freeing up cash from its existing assets “will strengthen the balance sheet and maintain returns”.
A key plank of the updated strategy is what the company calls operational excellence: putting more decision-making in the hands of individual sites, cutting layers of management and dropping non-core projects.
Rio said the changes had already delivered annualised productivity benefits of $650 million in the first three months, with “significantly more targeted”.
The group also flagged a more selective approach to capital spending. It expects mid-term capital expenditure, from 2028 onwards, to fall to less than $10 billion a year as major projects such as the Oyu Tolgoi copper mine in Mongolia, the Simandou iron ore development in Guinea and the Rincon lithium project in Argentina move through construction and ramp-up.
Capital discipline, in this context, means committing funds only where returns justify it and keeping debt levels manageable.
Rio added that it could release between $5 billion and $10 billion of value from its existing asset base through options such as partnerships, partial ownership changes or other commercial arrangements where third-party funding is cheaper than redeploying its own capital. Strategic reviews of its Iron and Titanium, and Borates units are already underway.
On production, the miner expects 7% growth in 2025, underpinned by increases from its copper, iron ore and lithium developments. It sees compound annual production growth of 3% through to 2030.
It also upgraded its copper guidance for next year to 860,000-875,000 tonnes (from 780,000-850,000 tonnes), cut its expected copper unit costs, and said bauxite output would exceed previous guidance. Aluminium production is expected to land at the top end of its 3.25-3.45 million tonne range. Iron Ore Company of Canada output has been trimmed.
Looking further out, Rio said earnings before interest, tax, depreciation and amortisation (a common measure of operating profit) could be 40-50 % higher by 2030 based on long-run consensus commodity prices.
It expects copper-equivalent production to grow by about 20% over that period as new projects ramp up and existing operations become more efficient. The group also highlighted increasing diversification, with aluminium and copper becoming more meaningful contributors to earnings alongside iron ore.
On decarbonisation, Rio set out a revised capital estimate of $1-2 billion to 2030 for delivering a 50% reduction in emissions. This is much lower than earlier projections, which the company said reflected the use of third-party investment in renewable energy and a focus on technologies that are still maturing.
The group said it remains committed to its policy of returning 40-60% of earnings to shareholders, backed by what it called a “strong balance sheet” and a conservative net debt position.
Trott said the aim was to become “the most valued metals and mining company — for shareholders, the people who work with us, our partners and the communities around us”.