Copper, bauxite big for Rio Tinto in Q4

Rio Tinto (ASX: RIO) has released its Q4 CY24 production results, with copper and bauxite operations driving consistent performance and profitable growth.

Rio Tinto chief executive Jakob Stausholm says the company is making strong progress in delivering organic growth from its major projects.

“The Oyu Tolgoi underground copper mine in Mongolia continues to successfully ramp up, while the Simandou high-grade iron ore project in Guinea and our Western Range mine in the Pilbara are on schedule for first production this year,” he said.

“Significant milestones were achieved at our Rincon project in Argentina during the quarter, with first lithium delivered and receipt of Board approval to expand the operation, demonstrating both our operational capabilities and ambition to grow in battery materials.

“We remain focused on executing our strategy to deliver attractive shareholder returns and build a stronger, more diversified, and growing business, driven by our confidence in the long-term demand for materials essential to the global energy transition.”

In 2024, Rio delivered 1% production growth and a 3% increase in sales volumes, both on a copper equivalent basis (based on long-term consensus pricing). At its Investor Seminar in December, the Executive Committee outlined Rio’s ambition for a decade of around 3% compound annual growth in copper equivalent production, driven by Oyu Tolgoi in Mongolia, Simandou in Guinea and a new lithium portfolio.

Mined copper production of 697kt (consolidated basis) in 2024 was 13% higher than 2023, reflecting the ramp up of Oyu Tolgoi underground and increased production from Escondida in Chile due to higher grades fed to the concentrator (0.99% versus 0.83%). This offset geotechnical challenges at Kennecott in the United States as instabilities in the pit wall impacted the mining sequence from Q2.

Bauxite production was 58.7mt in 2024, 7% higher than 2023, exceeding guidance. The improvement was driven by the implementation of the Safe Production System, delivering record annual production at Amrun in Queensland and Gove in the Northern Territory, with the former currently operating above nameplate capacity.

The hallmark of 2024 was Rio’s mergers and acquisitions. On December 4, Rio signed a Term Sheet with Sumitomo Metal Mining (SMM) for a joint venture to deliver the Winu copper-gold project in WA.

In October, the company also announced a definitive agreement to acquire Arcadium Lithium (ASX: LTM) in an all-cash transaction aimed at brining Arcadium’s complementary lithium business into Rio’s portfolio.

In December, Rio also completed the sale of Dampier Salt Limited’s Lake MacLeod operation to Leichhardt Industrials Group and the sale of Sweetwater, a former uranium legacy site in the United States.

Rio also announced the approval of about $4b (USD$2.5b) to expand the Rincon project in Argentina, the company’s first commercial scale lithium operation, to an annual capacity of 60,000t of battery grade lithium carbonate.