Rio Tinto urges shareholders to reject proposal to | World Mining

Rio Tinto urges shareholders to reject proposal to – World Mining News

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Rio Tinto has urged shareholders to reject an activist investor’s proposal to abandon its main itemizing in London and consolidate its shares in Australia, arguing the transfer was not within the mining group’s “best interests”.

Rio, which on Wednesday reported its lowest underlying earnings in 5 years, has been below strain from Palliser Capital and others to observe BHP’s instance and ditch its dual-listing construction in Australia and the UK.

Palliser has argued a single Australian-domiciled holding company with a main itemizing on Sydney’s stock exchange would unlock $50bn in shareholder worth.

But Rio has rejected the transfer as too expensive and has canvassed high shareholders in Australia and the UK over the difficulty.

“The board considers that the resolution is not in the best interests of Rio Tinto as a whole and has recommended that shareholders of Rio Tinto plc vote against the resolution,” the company mentioned on Wednesday forward of its annual basic conferences in London and Perth in April and May.

The transfer follows rival mining group Glencore’s choice this week to review its UK itemizing, paving the best way for a change to New York or one other market that may “better suit” its business.

Rio Tinto’s earnings fell last yr due to weaker iron ore costs and inflationary pressures, the group mentioned. The main iron ore and aluminium producer mentioned underlying earnings fell 7 per cent in contrast with 2023 to $10.9bn. However, internet earnings, which consider impairments and asset disposals, rose 14 per cent to $11.6bn.

The average price of iron ore offered by Rio in 2024 was 11 per cent decrease than the earlier yr, it mentioned, contributing to a drop in earnings from the steelmaking ingredient.

Mining teams reporting their outcomes this week, resembling Glencore and BHP, have been hit by decrease costs for iron ore and coal and inflationary pressures which are pushing up working prices.

Although Rio has pointed to “signs of stabilisation” within the Chinese property market, which is a huge driver of commodities demand, it’s grappling with decrease iron ore earnings due to weaker total demand from the Asian nation.

Ben Davis, analyst at RBC, mentioned Rio’s annual outcomes have been “delightfully straightforward”, noting that dividends of $6.5bn for 2024 have been nonetheless according to expectations whilst underlying earnings fell barely beneath average forecasts.

Earnings from Rio’s aluminium and copper companies picked up, reflecting an enlargement of its giant Oyu Tolgoi copper mine in Mongolia.

Rio, which owns important aluminium operations in Canada, is extremely uncovered to the fast-changing tariff insurance policies of US President Donald Trump, in accordance to analysts. New measures introduced by the administration embody a 25 per cent tariff on US imports of aluminium and metal.

Chief govt Jakob Stausholm mentioned Rio may redirect some of its Canadian aluminium away from the US market as a outcome of the tariffs. Canada is the most important exporter of aluminium to the US.

“It is probably not going to be significant for us, it might be more hard for our customers,” mentioned Stausholm, who’s in Washington this week to meet Trump administration officers.

Rio’s giant portfolio of commodities — which span from lithium and copper to iron ore — would help to minimise the influence of particular tariffs, he added.

Rio has a number of US mines and processing amenities, and is ready for a choice from the nation’s Supreme Court that might decide the destiny of its proposed development of the Resolution copper mine in Arizona.

Three members of Rio’s board will step down this yr — Sam Laidlaw, Simon Henry and Kaisa Hietala — shrinking its measurement from 14 members to 11.

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