Rio Tinto May Require Enhanced Copper Pipeline to Address Post 2030 Growth Gap UBS Analysis Suggests

UBS has indicated that Rio Tinto Ltd may need to strengthen its copper project pipeline to prevent a growth gap emerging beyond 2030, with Argentina’s Los Azules project presenting a potential solution to this challenge. The Swiss bank maintains a Neutral rating on Rio Tinto, setting a price target of 7,300 pence.

According to the bank’s analysis, the mining company is positioned to increase copper production from 883,000 tonnes in 2025 to approximately 1 million tonnes by 2030. This growth trajectory will be primarily supported by contributions from the Oyu Tolgoi and Kennecott operations. However, UBS has identified a notable absence of substantial growth options in the medium term spanning 2030 to 2035.

The bank’s assessment suggests that Rio Tinto “does however lack meaningful copper growth optionality medium-term 2030-35”, with projects including Resolution, La Granja and Nuevo Cobre positioned for longer-dated development, whilst Winu presents a relatively modest scale opportunity.

Los Azules has emerged as a candidate to address this strategic gap. Rio Tinto currently holds a 17 per cent stake in the Argentine copper project and was reportedly evaluating an increase to this holding in May of this year. UBS characterises Los Azules as a long-life, low-cost solvent extraction and electrowinning operation with first copper production targeted for 2030.

The 2025 feasibility study for the project outlines production of 205,000 tonnes of annual cathode output during the initial five years of operation. The study indicates C1 costs of 1.71 US dollars per pound, all-in sustaining costs of 2.11 US dollars per pound, and capital expenditure requirements of approximately 3 billion US dollars.

Based on UBS’s long-term copper price assumption of 5.50 US dollars per pound, the bank estimates Los Azules could achieve a valuation of approximately 5 billion US dollars, delivering an internal rate of return of roughly 28 per cent.