Rio Tinto Continues to Ramp Up Iron Production: What's the Road Ahead?

Rio Tinto Group RIO reported strong growth in iron ore production and shipments in the fourth quarter of 2025. During the quarter, Pilbara iron ore shipments reached 91.3 million tons, increasing 7% from the year-ago-quarter figure. The company’s Pilbara iron ore production stood at 89.7 million tons (up 4% year over year), reflecting robust output despite weather-related disruptions earlier in 2025.

The robust performance was primarily supported by Rio Tinto’s Pilbara operations in Western Australia. The Gudai-Darri project continued its strong performance in the fourth quarter, after achieving a record 51 million tonnes per annum (Mtpa) run rate in the previous quarter. The successful rollout of the new Pilbara Blend product strategy also contributed to improved product mix, with lower SP10 volumes as planned.

Also, the company is poised to benefit from several of its major growth projects. 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 likely to conclude in 2029. In October 2025, at the Simandou iron ore project based in Guinea, the first ore was loaded and transported. It marked the start of commissioning across the mine, rail and port infrastructure.

The company’s strong performance at the Gudai-Darri facility, supported by record output and improved system efficiency, highlights Rio Tinto’s operational strength in iron ore. Its major pipeline of projects, including the likes of Rhodes Ridge and Simandou, is 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 ore sales totaled 84.9 metric tons (Mt) in the fourth quarter of 2025, which marked 5% growth from last year’s comparable quarter. Vale’s iron ore production was up 6% to 90.4 Mt from the year-ago quarter. Vale’s average realized iron ore fines price increased 1.1% quarter over quarter to $95.40 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 and Estimates

Shares of Rio Tinto have gained 57.2% in the past six months compared with the industry’s growth of 42.4%.

From a valuation standpoint, RIO is trading at a forward price-to-earnings ratio of 11.88X, below the industry’s average of 16.00X. Rio Tinto carries a Value Score of B.

The Zacks Consensus Estimate for RIO’s 2026 earnings has increased 12.3% 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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