Rio Tinto, a mining company based in Australia, has predicted a rise in the production of mined refined copper next year due to an expected surge at its Oyu Tolgoi Mine in Mongolia.
According to a release from the mining giant, it expects its Oyu Tolgoi operation in Mongolia to increase production by 50% next year.
In a press release, the mining company stated that its goal is to produce 1 million tonnes of copper annually by the end this decade.
Rio Tinto is shifting its focus from iron ore to copper production. The company expects a 3% growth per year starting this year.
In the report, CEO Jakob Stausholm stated that “We are executing a strategy to deliver a stronger and more diversified business, underpinned our belief in demand for materials, which are essential for global energy transformation.”
We can continue to maintain a strong financial position and dividend policy while maintaining growth and decarbonisation.
Forecast for production and capital expenditure
Rio Tinto expects to produce 780,000-850,000 tonnes of copper in 2025, compared to 660,000-720,000 tonnes in 2017.
The company also raised its capital expenditure guidance from $9.5 billion to $11.0 billion for 2025, compared to the $9.5 billion it had set last year.
The company also maintained its projected capital spending for decarbonization through 2030 in the range of $5-$6billion.
The company also said that significant progress was being made in the construction of port, mine and rail infrastructure in Simandou, Guinea. Simandou is on track to produce the first ore in 2019 and reach its full capacity by 2028.
Stausholm stated that “as we accelerate the Oyu Tolgoi copper mine in Guinea, deliver the Simandou iron ore high-grade project, and expand our lithium business by acquiring Arcadium we are securing ten years of profitable growth.”
We plan to use our strong balance to unlock and accelerate Arcadium’s tier-one projects in time to meet future growth.
LME copper prices down
The dollar index has been a major factor in driving down the copper benchmark prices at the London Metal Exchange.
The dollar is stronger, and therefore the price of commodities in dollars will be higher for buyers from abroad.
Rio Tinto’s positive outlook for copper production may also have a negative impact on the overall mood in the copper markets, as demand has remained low.
The Chinese economy’s struggles in 2024 will have an impact on the consumption of copper. There are also concerns about the impact of Donald Trump’s tariffs against China.
Investors will pay attention to the speech by US Federal Reserve chair Jerome Powell on Wednesday evening for more clues about the bank’s position on interest rates.
The three-month contract for copper on the LME at the time this article was written, was $9,098.50 a ton, down by 0.3% from its previous close.
The post Rio Tinto’s copper production forecast for 2025 may be updated as new information becomes available.
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