Rio Tinto Group’s copper head, Bold Baatar, has outlined the company’s strategy to prioritize organic growth in building new mines rather than pursuing acquisitions.
This stance may diverge from expectations of increased mining dealmaking in the industry.
With ambitions to boost copper production to one million metric tons within five years, Rio Tinto aims to achieve this goal through expanding existing operations and engaging in exploration activities globally. Baatar emphasized the company’s focus on partnering in projects rather than acquiring already established assets.
Despite acknowledging the rising costs and complexities associated with project development, Baatar emphasized the cost-effectiveness of building mines compared to acquiring existing ones.
He cited the example of a Chilean copper mine built for $20,000 per metric ton of production, contrasting with public companies trading around $60,000 per ton.
Baatar stressed that industry consolidation should prioritize increasing copper supply to meet the growing demand driven by the energy transition.
Mere mergers and acquisitions, he argued, do not inherently add more copper to the market; instead, the focus should be on strategies to enhance overall supply.
Rio Tinto’s strategic approach underscores its commitment to sustainable growth and addressing the evolving demands of the copper market amidst the global transition to cleaner energy sources.
