Rio Tinto Group (RIO) Balances $207B Merger Speculation With Cost Reduction and Copper Production Goals

Rio Tinto Group (NYSE:RIO) is one of the best metal stocks to buy right now. On January 9, Reuters reported that Glencore is in takeover talks with Rio Tinto Group (NYSE:RIO) on a potential all‑share deal that could create the world’s largest mining group worth nearly $207 billion. The miners have explored a merger before, with Rio rejecting Glencore’s 2014 bid and talks in late 2024 ending without agreement. With a new CEO at Rio and intensifying competition for copper and other metals vital to the energy transition and AI, the companies confirmed discussions after the Financial Times highlighted the negotiations.

Earlier on December 17, analysts at Berenberg reiterated a Hold rating on the stock and maintained a $70 price target. The cautious outlook comes on the heels of the Anglo-Australian miner embarking on a cost reduction plan.

The company aims to cut costs and offload up to $10 billion in assets to bolster earnings by as much as 50% by 2030. Under the leadership of Simon Trott, management is focused on ensuring a sharper, simpler business that delivers higher returns to investors. Part of the drive entails unlocking between $5 billion and $10 billion from the asset base by reviewing ownership of land, infrastructure, mining, and processing businesses.

Rio Tinto is targeting 40% to 50% earnings growth by 2030, based on long-run consensus prices, driven by a 20% increase in copper production and an improved operational model. In addition, it plans to drop capital expenditure to below $10 billion by 2028 as it reduces spending on decarbonization. The company has already secured a 15-year renewable energy deal with TerraGen for the supply of 78.5 megawatts of energy from the Monte Cristo I Windpower project in Texas.

Rio Tinto Group (NYSE:RIO) is a leading global mining and materials company that extracts and processes essential resources like iron ore, copper, aluminium, lithium, and other critical minerals, which are vital for construction, everyday products, and the world’s transition to low-carbon energy.

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Disclosure: None. This article is originally published at Insider Monkey.