RIO to Invest $1.2B in Quebec Hydroelectric Power Plant Upgrade

Rio Tinto Group RIO is set to invest $1.2 billion (CAD $1.7 billion) to modernize its 100-year-old Isle-Maligne hydroelectric power plant in Quebec, Canada. This is RIO’s most significant investment in its hydroelectric assets in more than seven decades.  It is aimed at securing the long-term future and competitiveness of its low-carbon aluminum production in the Saguenay–Lac-Saint-Jean region. Notably, the region accounts for around 50% of Rio Tinto’s global aluminum production.

RIO’s Efforts to Boost Efficiency and Reliability of Plant

The Isle-Maligne hydroelectric power plant, commissioned in 1926, has been a strategic asset for Rio Tinto. The modernization of this plant will involve the replacement of eight turbine-alternator groups, refurbishing the water intake and hydraulic passage, and the construction of an extension and mechanical workshop to the north of the power station. It also entails the replacement of electrical and mechanical equipment, and making modifications to the spillway so that it can be used reliably in winter.

Scheduled for completion by 2032, the project will need a workforce of more than 300 people on the site at its peak. 

The current investment adds to the previously announced projects worth a combined $183 million (CAD 252 million) for the refurbishment of butterfly valves and work on two other turbine-alternator groups at the Isle-Maligne power plant.

Rio Tinto Targets Long-Term Low-Carbon Aluminum Output

This project will ensure a more efficient, safe and reliable power supply of renewable energy to Rio Tinto’s smelters, casting houses and other facilities. 
Rio Tinto is one of Canada's largest private producers of hydroelectricity. Its seven hydroelectric facilities in Quebec and British Columbia provide a competitive advantage, enabling the company to produce some of the highest quality, lowest carbon footprint aluminum in the world. An eighth power station supplies hydropower to Rio Tinto IOC’s port operations in Sept-Îles, Quebec.

RIO Stock's Price Performance

In the past year, shares of Rio Tinto have lost 14.7% compared with the industry’s 14.5% decline.

RIO Zacks Rank & Stocks to Consider

Rio Tinto currently has a Zacks Rank #3 (Hold). 

Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, Agnico Eagle Mines AEM and Hawkins HWKN, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology has an average trailing four-quarter earnings surprise of 11.10%. The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $7.27 per share, suggesting a 53.4% year over year growth. Carpenter Technology shares have surged 109% in the last year.

Agnico Eagle Mines has an average trailing four-quarter earnings surprise of 8.2%. The Zacks Consensus Estimate for AEM’s fiscal 2026 earnings is pegged at $4.54 per share, indicating year-over-year growth of 12.7%. Agnico Eagle Mines shares have appreciated 52.5% in the last year.

The Zacks Consensus Estimate for Hawkins’ fiscal 2026 earnings is pegged at $4.54 per share, indicating year-over-year growth of 12.7%. HWKN shares have gained 37% in the last year.

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

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