Rio Tinto Limited (ASX: RIO) has announced the latest stage of its expansion plans to take advantage of electric vehicles and batteries.
Rio Tinto’s origins date back more than 145 years, but today it is one of world’s largest aluminium and iron ore producers, with much of its sales revenue coming from its operates in Western Australia. It also owns, fully or partly, mining projects for copper, diamonds, uranium and other minerals.
Rio Tinto’s Expansion Plans
Rio Tinto has announced it has committed an additional $302 million of capital to advance its Resolution Copper project in the US state of Arizona.
Resolution Copper Mining is a company owned 55% by a Rio Tinto subsidiary and 45% by a BHP Group Ltd (ASX: BHP) subsidiary. The funding is proportionally split between the project partners.
The additional capital that is being added will be used to fund additional drilling, ore-body studies, infrastructure improvements and activities related to advancing the project to the final stage.
Resolution has the potential to supply nearly 25% of the United States copper demand. Rio and BHP have already invested over $2 billion in sinking a new shaft to mining depth, rehabilitating an existing shaft, extensive drilling and ore body testing, and the permitting and public engagement process.
Rio and BHP are expecting the project’s copper to be in demand because of the rise of electric vehicles, battery storage, new transmission technology and other green energy innovations which are copper intensive.
I also think it’s a good idea because it means it’s American copper that will be used in American products.
Rio Tinto CEO J-S Jacques commented, “Resolution is one of the most significant undeveloped copper deposits in the world and this additional funding demonstrates Rio Tinto’s commitment to bring the mine into production.”
Is Rio Tinto A Buy?
It’s the focus on commodities that will be more in demand in the future that could mean Rio Tinto continues to provide decent returns over the long term, although there will commodity cycles.
Whatever the future holds, we will need materials of some kind, so Rio Tinto can mine those that are in demand. I don’t think I would ever buy shares of mining businesses myself, but I can see why some people would, but now isn’t the best time do it.
The below ASX shares in the FREE report may prove to be more reliable profit growers in the future, which is why I’m considering them for my portfolio.
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