Rio Tinto has reaffirmed its commitment to decarbonisation and announced a higher percentage of growth capital for the future.
The major miner aims to increase its annual growth capital by up to $US3 billion ($4.2 billion) by 2023 to 2024, with its newly acquired Rincon lithium project, Oyu Tolgoi copper-gold project in Mongolia and Simandou iron ore project in Guinea to be the key focuses.
“We have demonstrated our willingness to grow via acquisitions,” Rio chief executive Jakob Stausholm said at the company’s 2022 annual general meeting.
“The Rincon lithium project in Argentina brings growth in a commodity essential to the energy transition, while at Oyu Tolgoi our proposal to acquire full ownership of Turquoise Hill will simplify the ownership structure and provide additional exposure to copper.
“We believe the terms of proposal are compelling for Turquoise Hill shareholders, and Rio Tinto will remain disciplined in pursuing this opportunity.”
Rio is after a full stake in Canada’s Turquoise Hill Resources. In March, the company proposed to acquire the remaining 49 per cent interest it doesn’t currently own.
The transaction would see Turquoise Hill minority shareholders receive $C34 ($37) per Turquoise Hill share, valuing Turquoise Hill’s total minority shares at approximately $US2.7 billion ($3.8 billion).
If the transaction is successful, Rio Tinto would own a 66 per cent stake in Oyu Tolgoi with Mongolia holding the remaining 34 per cent interest in the mine.
Stausholm said the company’s future direction would be underpinned by their environmental, social and governance (ESG) prerogative.
“We continue to look for new options and innovative ways of developing projects faster, but we will only do this in line with our ESG standards, while maintaining our absolute commitment to capital discipline,” he said.
“An example of this approach in action is Simandou. This project will deliver the high-grade iron ore essential to decarbonising the world’s steel industry.”
Rio Tinto owns 45 per cent of Simandou’s southern half, Blocks 3 and 4, with the Guinean Government holding 15 per cent and Aluminium Corporation of China the remaining 40 per cent.
After suspending all Simandou activities in early March, Guinea’s ruling junta gave Rio Tinto and Winning Consortium Simandou (who is developing Blocks 1 and 2) the green light to resume activities in late March.
The decision didn’t come without its warnings, though, with Guinea Mines Minister Moussa Magassouba emphasising a strict development timeline for the project, with infrastructure projects needing to be completed by December 2024.