Rio Tinto (ASX, LON: RIO) chief executive Simon Trott has outlined a plan to generate $5 billion to $10 billion through divestments and productivity growth as he moves to simplify the world’s second largest miner’s structure. In his first major strategy briefing almost five months into the job, Trott said he wants Rio to become the world’s “most valued” miner and that post-execution, the company will be “stronger, sharper and simpler”. The strategy centres on narrowing Rio’s portfolio to iron ore, copper, aluminum and lithium while applying tighter capital discipline across the business. Rio shares jumped almost 4% on Thursday to a record $140.58, extending a 17% gain over the past year, though the stock still lags BHP on a price-to-earnings basis.

Trott aims to close that gap by selling non-core units (including titanium dioxide and borates) and exploring commercial, partnership or ownership changes across land, infrastructure, mining and processing assets. Investors have awaited specifics since August, when Rio announced streamlining to three core units and pursuing only the most profitable operations. Rio now joins global rivals in offloading non-core assets, cutting jobs and tightening capital amid shifting commodity cycles and pressure for stronger returns. The company will release cash from projects where third-party funding falls below its cost of capital and review sales of smaller product lines.

Capital expenditure is projected to drop below $10 billion a year from 2028 as spending on large projects winds down and as the company scales back decarbonisation investments. Decarbonization spending has been cut to $1 billion to $2 billion through 2030, down from an earlier target of $5 billion to $6 billion. Investment in new lithium projects will proceed only “when supported by markets and returns”, Trott told investors.

Assets marked for review include titanium, borates, land, infrastructure and processing facilities (those Rio “does not need to own”). Rio is also exploring partnership options and targets a 4% unit cost reduction from 2024 to 2030. Trott added the company is working with top shareholder Chinalco to resolve governance constraints limiting share buybacks. He has already trimmed leadership ran...

Global miners are cutting costs amid volatile prices and long-term demand uncertainty pressuring valuations. Glencore (LON: GLEN) announced 1,000 job cuts this week to improve performance, while Vale (NYSE: VALE) downgraded iron ore output guidance as new supply enters the market. Peers like Anglo American (LON: AAL) and Teck Resources (TSX: TECK.A/B, NYSE: TECK) are advancing a proposed $53 billion merger. Rio held preliminary talks with Glencore about a combination earlier this year but Trott dismissed further large-scale consolidation unless it delivers clear “synergies” and “value”.

BMO Capital Markets analysts offered a slightly positive take: guidance updates align with estimates, though higher 2025 copper output is offset by lower 2026 figures. The return to <$10 billion annual capex (mid-term) and $5-10 billion divestment proceeds are positives, but Simandou’s 2026 sales (5-10 million tonnes, 100% basis) fall short of BMO’s 19 million tonne estimate, indicating slower ramp-up.

Rio raised its 2025 copper production forecast due to stronger Oyu Tolgoi (Mongolia) activity, with output up to 3% higher than earlier estimates. 2024 copper production is projected at 860,000-875,000 tonnes (up from prior 780k-850k), followed by 800k-870k in 2026. Bauxite output will beat expectations, while Canadian iron ore volume will underperform. Rio is shifting toward copper with a 1 million tonne annual target by 2030 (iron ore remains top profit driver). Copper prices are at record levels amid green energy transition demand; Oyu Tolgoi’s output will rise over 50% this year and ~15% in 2026.

Rio’s Australian iron ore division (key unit) will maintain steady volumes, with 2026 Pilbara production forecast at 323-338 million tonnes. Guinea’s Simandou mine shipped first ore this week and expects 5-10 million tonnes in 2026. Rio shares climbed 36% since June 20, supported by rising copper prices, resilient iron ore markets, and expectations of Trott boosting cash flow via asset sales and cost cuts. Benchmark 62% iron ore traded at $108/tonne on December 3, up from <$93 in mid-June.