Rio Tinto, the world’s second-largest mining company, announced that it is open to acquiring significant copper assets if they provide exceptional value. However, the company acknowledged that purchasing high-quality assets in today’s competitive market would be very costly.
For a long time, Rio Tinto has focused on expanding its copper business in response to expected strong demand that will surpass supply. The company has traditionally believed that building new mines is a better strategy for growth than purchasing existing assets. However, as its main competitor, BHP, moves to consolidate the copper sector, Rio Tinto appears to be reevaluating its stance.
Chief Executive Jakob Stausholm emphasized that Rio Tinto is not dismissing the possibility of large takeovers in the copper sector, noting that the company has reached a critical turning point. He mentioned that Rio Tinto aims to achieve around 3% compound annual growth in copper output from 2024 to 2028 through its existing operations and projects. This goal was reiterated during the company’s first-half results call.
Stausholm also stated that Rio Tinto’s copper equivalent production is on track to grow by about 2% this year. He highlighted that the company is well-positioned to deliver on several large projects that will drive future growth. One of the key projects is the underground copper mine at Oyu Tolgoi in Mongolia, which is expected to become the world’s fourth-largest copper operation by 2020.
The conveyor system at Oyu Tolgoi is now 97% complete, with commissioning anticipated in September. Stausholm pointed out that this development is crucial for ramping up production, marking a significant milestone for Rio Tinto’s copper business. The mine, which started as an open pit in 2011, added underground production last year. It is projected to produce half a million tonnes of copper annually from 2028 to 2036.
In Arizona, Rio Tinto is also progressing with the Resolution copper mine, a joint venture with BHP. Despite facing opposition from some indigenous and environmentalist groups, Stausholm expressed confidence that the project would move forward. He assured that Rio Tinto is committed to following United Nations principles, which require full consent from Indigenous groups for mining on traditional lands. This pledge comes after the company’s controversial destruction of significant rock shelters in Western Australia for an iron ore mine in 2020.
Stausholm acknowledged that the US government is exerting immense pressure on Rio Tinto to develop the Resolution project, as it holds a quarter of the country’s known copper reserves. While he could not provide a specific timeline, he remained optimistic about the project’s prospects.
Rio Tinto’s copper growth strategy includes forming strategic alliances with other producers. One of its key partners is Codelco, Chile’s state-owned copper miner and the world’s largest producer. Codelco has seen its output decline to a 25-year low and is actively seeking new commercially viable deposits. Additionally, Rio Tinto has a venture with First Quantum Minerals to develop the La Granja project in Peru, currently ranked as the world’s fourth-largest copper project.
The mining giant is also exploring innovative ways to recover copper from tailings. It is testing its Nuton bioleaching technology in partnership with Arizona Sonoran Copper. Nuton is the result of nearly 30 years of in-house research and development. It aims to deliver carbon-neutral copper, with Rio Tinto estimating that it can produce 0.4 tonnes of CO2 equivalent for Scope 1 and 2 emissions per tonne of Nuton copper. This is a significant reduction compared to the 5.2 tonnes of CO2 equivalent generated by standard, conventional primary copper production.
