New Rio Tinto CEO plans shakeup as mining giant ramps copper production

FILE: Ore is hauled from the Kennecott's Bingham Canyon Copper Mine in Herriman, Utah. (AP Photo/Rick Bowmer)

Rio Tinto’s new chief executive Simon Trott on Thursday unveiled plans to revamp the British-Australian mining giant as it ramps up production of copper, a metal in high demand.

Rio Tinto is heavily focused on Australia, the leading exporter of iron ore that mostly heads to China for making steel.

However along with rivals, the company is seeking to build its stake in copper, a coveted metal used in electric-vehicle batteries and data centres for artificial intelligence.

“We are building from a position of strength for Rio Tinto’s next chapter, sharpening and simplifying the business to deliver leading returns,” Trott said in a statement Thursday ahead of addressing investors in London.

‘Discipline’

“We will drive performance through discipline, productivity and unmatched growth to unlock the full potential of our diversified portfolio of world-class assets,” Trott added.

The CEO, who in late August stepped up from his role as head of Rio Tinto’s iron ore division, upgraded Thursday the group’s forecast for copper production in 2025 -- to as much as 875,000 tonnes from up to 850,000.

The company added that its plans to cut costs and offload assets, delivering billions of US dollars, as Rio Tinto aims to “eliminate waste” and become “stronger, sharper and simpler”.

Trott said the changes could see company earnings increase by up to 50 percent by 2030.

Derren Nathan, head of equity research at Hargreaves Lansdown, said the “bold ambitions... if achieved, should put the mining giant on a firmer footing.

“Cost reductions and further diversification away from iron ore into future facing metals such as lithium and copper are all on the table,” he added.

Copper demand has exploded in recent years, with the metal needed also for solar panels, wind turbines and military hardware.

Surging demand has pushed copper prices to record highs this year, while lithium is also in strong demand thanks to its use in electric vehicles and other clean energy technologies.

Trott’s restructuring announcement comes soon after Australian resources giant BHP ended a renewed attempt to buy British rival Anglo American -- a deal that would have created the world’s largest miner of copper.