In February, Rio reported a broadly in-line FY25 result, with earnings essentially flat as strength in copper and aluminium was offset by ongoing weakness in iron ore, driven by China’s soft property market. Revenue and earnings came in slightly ahead of expectations, while free cash flow was weaker year-on-year. Guidance was maintained, pointing to steady operational performance. Strategically, Rio is focusing on organic growth after stepping away from a potential Glencore tie-up. Copper was a standout, with profits doubling on stronger prices and expansion, although its medium-term growth profile still lags peers at a time when investor focus on the metal continues to build.
- Iron ore still drives ~60% of Rio’s revenue, despite the push into copper and diversification elsewhere.
RIO is a quality iron ore producer with growing leverage to copper and lithium. In our view, it remains a world-class, diversified miner offering strong exposure to iron ore alongside key future-facing commodities.
- We like RIO targeting new highs in the coming year, but we still prefer BHP, believing it has a superior commodity mix.
MM is bullish toward RIO around $144
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