Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) has outlined a more optimistic growth and capital expenditure outlook to 2030, with upgraded production guidance for key commodities and a commitment to shareholder returns, according to a note from Citi.
Following the miner’s Capital Markets Day, the American bank said Rio Tinto is now guiding for stronger volumes in copper, bauxite, aluminium and lithium in 2025 and 2026, with full-year production estimates coming in ahead of the bank’s previous forecasts.
Notably, copper unit costs have been revised lower, enhancing margins in a key growth segment.
The upgraded guidance implies a 7% t increase in production volumes in 2025 and an annualised growth rate of 3 per cent through the end of the decade. “Rio’s CMD’25 has laid out an attractive vision for the company with positive guidance commentary for ‘25 & ’26,” Citi said.
On capital expenditure, Rio expects mid-term spending to normalise below $10bn per year. Citi also highlighted a potential $5bn to $10bn cash release from asset divestments, which it said would underpin strong cash generation and support the group’s existing dividend payout range of 40% to 60%.
Citi added that the company’s targets are “likely to be positively received by the market and lead to [valuation] consensus upgrades.”
The bank said Rio Tinto’s guidance reaffirms confidence in its long-term growth strategy while maintaining capital discipline.