Rio Tinto’s profit edged up 1.8 per cent during the first half of the year, as the miner has begun to eye a takeover in the copper space.
While the miner derives most of its profit from iron, it is increasingly focusing on copper thanks to its strong prices, as iron prices have dropped 15 per cent since the start of the year, while copper prices have jumped 12 per cent.
The group’s copper production is on track to grow about two per cent this year, and it aims to deliver a three per cent growth in the field annually until 2028, it said in its interim results.
City sources have been whispering about a takeover from Rio Tinto in recent weeks, with the group apparently studying a refreshed list of potentially industry-reshaping targets including Canadian Teck Resources.
Rio Tinto has drawn up detailed proposals for a potential bid for the company, including approaching banks about financing a deal, according to reports.
Speaking on a media call following the release of the results, Rio Tinto CEO Jakob Stausholm said the company would consider a large acquisition in the copper business, but it would have to provide value in a “heated market”.
“That’s not an easy market to just buy yourself into. While we are looking we are also saying, we are not prepared to pay those prices,” Stausholm explained.
Analysts’ concerns were also put to rest as despite poor performance from the Chinese economy, which is the largest consumer of metals on the planet, Rio Tinto managed to keep full-year production guidance unchanged, with its CEO saying the group sees stable demand from the country.
Following the results, Rio Tinto, which is listed in both Australia and London, saw its Sydney-listed shares rise 0.9 per cent in the hours after release.