Rio Tinto may need to bulk up its copper pipeline, Swiss bank says Proactive uses images sourced from Shutterstock
UBS says Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) may need to bulk up its copper pipeline if it is to avoid a growth gap after 2030, with Argentina’s Los Azules project emerging as a possible answer.
The bank, which rates Rio at Neutral, with a 7,300p price target, said the miner is on track to lift copper output from 883,000 tonnes in 2025 to around 1 million tonnes by 2030, helped by Oyu Tolgoi and Kennecott.
Beyond that, UBS sees fewer clear options. It said Rio “does however lack meaningful copper growth optionality medium-term 2030-35”, with Resolution, La Granja and Nuevo Cobre longer-dated and Winu relatively small.
Los Azules could help fill the hole. Rio already owns 17% of the Argentina copper project, and was reported in May to be considering increasing its stake.
UBS described Los Azules as a long-life, low-cost SXEW operation targeting first copper in 2030. The 2025 feasibility study points to 205,000 tonnes of annual cathode output in the first five years, US$1.71/lb C1 costs, US$2.11/lb AISC and roughly US$3bn of capex.
At UBS’s long-term copper price of US$5.50/lb, the bank estimates Los Azules could be worth around US$5bn, with an IRR of roughly 28%.