Rio Tinto outlines plan to cut costs, raise productivity at strategy day

[MELBOURNE] Rio Tinto CEO Simon Trott outlined a plan to focus on cost cuts and productivity gains at his first strategy day on Thursday (Dec 4) as he undertakes a divestment plan to simplify the structure of the world’s largest iron ore miner.

Measures that Rio would take include a 4 per cent cut in unit costs from 2024 to 2030, the miner said in a statement.

Rio also said capital discipline, rising prices for its commodities and 20 per cent growth in copper production could help boost its earnings by as much as half by the end of the decade.

In August, Trott said Rio would streamline its structure to three core business units from four, to focus on profitable assets. Assets up for sale include Rio’s titanium and borates businesses, among others.

The miner also upgraded its 2025 copper production forecast, citing a ramp-up of operations at its Oyu Tolgoi project in Mongolia.

Rio said it now expects 2025 copper production between 860,000 and 875,000 tonnes on a consolidated basis, compared with its previous forecast of 780,000 to 850,000 tonnes. It expects copper production between 800,000 and 870,000 tonnes in 2026.

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While Rio Tinto’s profits primarily stem from iron ore, the miner is shifting its focus towards copper, aiming to reach an annual copper production of one million tonnes by 2030.

Copper prices have reached record levels and the commodity is expected to be in high demand during the transition to greener forms of energy.

Rio said it remains on track to boost copper output at Oyu Tolgoi by more than 50 per cent this year and by about 15 per cent in 2026. REUTERS