Is RIO's Higher Iron Ore Production a Catalyst for Future Growth?

Rio Tinto Group RIO reported solid growth in iron ore production in the third quarter of 2025. During the quarter, Pilbara iron ore shipments reached 84.3 million tons, increasing 6% from the previous quarter. The company’s total Pilbara iron ore production stood at 84.1 million tons, reflecting robust output despite weather-related disruptions earlier in the year.

The robust performance was primarily supported by Rio Tinto’s Pilbara operations in Western Australia. The Gudai-Darri project achieved its highest-ever quarterly production in the third quarter, operating at a run rate of 51 million tons per annum, while shipments rose on a sequential basis despite planned maintenance and infrastructure works. The successful rollout of the new Pilbara Blend product strategy also contributed to improved product mix, with lower SP10 volumes as planned.

Also, several major growth projects of the company are progressing. In December 2025, RIO’s Rhodes Ridge joint venture approved a $191 million feasibility study to develop one of the world’s major undeveloped iron ore deposits in Western Australia, aiming for an initial annual production of 40-50 million tons. The study is expected to conclude in 2029. In October 2025, at the Simandou iron ore project in Guinea, the first ore was loaded and transported, marking the start of commissioning across the mine, rail and port infrastructure.

The strong quarterly performance, supported by record output at the Gudai-Darri facility and improved system efficiency across the Pilbara, highlights Rio Tinto’s operational strength in iron ore. Major growth projects, such as Rhodes Ridge and Simandou, are advancing steadily, positioning the company well for long-term growth.

Snapshot of RIO’s Peers

Among its major peers, Vale S.A.’s VALE Iron Solutions segment generated net operating revenues of around $8.42 billion in the third quarter of 2025, which marked 5.7% growth from last year’s comparable quarter. Vale’s total iron ore shipments were up 5% from the year-ago quarter. Vale’s average realized iron ore fines price increased 4% year over year to $94.40 per ton.

Its other peer, BHP Group Limited BHP, produced a record 263 Mt of iron ore in fiscal 2025. This came within BHP Group’s guidance of 255-265.5 Mt and was up 1% year over year. Production at BHP Group’s Western Australia Iron Ore was a record of 257 Mt (290 Mt on a 100% basis).

RIO's Price Performance, Valuation & Estimates

Shares of Rio Tinto have gained 43.8% in the past six months compared with the industry’s growth of 27.3%.

From a valuation standpoint, RIO is trading at a forward price-to-earnings ratio of 12.13X, below the industry’s average of 17.56X. Rio Tinto carries a Value Score of B.

The Zacks Consensus Estimate for RIO’s 2026 earnings has been on the rise over the past 60 days.

Rio Tinto currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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