Seeing red

20 December 2018 By Clara Ferreira Marques

Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.

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More than 70 percent of Rio Tinto’s underlying earnings came from iron ore in the first half of 2018.

Chief Executive Jean-Sébastien Jacques and other executives have said they would like to increase exposure to copper, which has widespread industrial use and where supply is waning.

- Rio has set up a division to focus on smaller mining projects, but Rio Tinto Ventures has yet to make an acquisition.

Teck Resources announced on Dec. 4 that it had sold a 30 percent stake in its Quebrada Blanca copper mine expansion in northern Chile to Japan’s Sumitomo for $1.2 billion. Rio had been named as one of the parties considering the investment.

Freeport-McMoRan has agreed to sell a majority stake in its Grasberg copper mine in Indonesia to the government, through a series of deals worth $3.85 billion. Rio agreed in July to sell its participating interest in the mine to state mining company Inalum for $3.5 billion. A binding deal is due to be signed before the end of 2018.

Context News

More than 70 percent of Rio Tinto’s underlying earnings came from iron ore in the first half of 2018.

Chief Executive Jean-Sébastien Jacques and other executives have said they would like to increase exposure to copper, which has widespread industrial use and where supply is waning.

- Rio has set up a division to focus on smaller mining projects, but Rio Tinto Ventures has yet to make an acquisition.

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