By Australian mining giant Rio Tinto has forecast higher consolidated mined refined copper production next year, driven by an anticipated surge in output from the Oyu Tolgoi mine in Mongolia.
The mining giant anticipates a 50% surge in production from its Oyu Tolgoi operations in Mongolia next year, according to an official release.
The mining company said in a release that it is targeting an annual production of 1 million tons of copper by the end of this decade.
While most of Rio Tinto’s profits are concentrated in its iron ore business, the company is shifting focus to copper production with a projected 3% annual growth from this year onwards.
“We are executing our strategy of delivering a stronger, more diversified, and growing business, underpinned by our belief in the demand for materials which are essential for the global energy transition,” CEO Jakob Stausholm said in the report.
With improved performance we can afford both growth and our decarbonisation, and continue our dividend policy and practice while preserving a strong balance sheet.
Production and capex forecast
Rio Tinto said it expects copper production at 780,000-850,000 tons in 2025 compared with 660,000-720,000 tons in the previous year.
The company has also increased its capital expenditure guidance to $11.0 bln for 2025 compared with $9.5 bln in the previous year.
Additionally, the company maintained its projected capital expenditure for decarbonization initiatives through 2030 at the lower end of the $5-$6 billion range.
Meanwhile, the company said significant progress is underway in the construction of the port, mine, and rail infrastructure at Simandou in Guinea. Simandou remained on track for the first ore next year and to reach full capacity by 2028.
“As we ramp up the Oyu Tolgoi underground copper mine, deliver the Simandou high-grade iron ore project in Guinea, and build out our lithium business through the proposed acquisition of Arcadium, we are underwriting a decade of profitable growth,” Stausholm said.
“We plan to utilize our strong balance sheet to unlock and accelerate Arcadium’s tier one projects, timed to meet future demand growth.”
LME copper prices down
Meanwhile, the benchmark copper prices on the London Metal Exchange fell on Wednesday pressured by strength in the dollar index.
A stronger dollar makes commodities priced in the greenback more expensive for overseas buyers.
The positive forecast for copper production by Rio Tinto may also weigh on overall sentiment in the copper market as demand remained muted.
China’s struggling economic activities throughout 2024 have weighed on copper consumption. Additionally, there are concerns that the US President-elect Donald Trump’s tariffs on China could further depress demand.
Investors will be focused on an address by the US Federal Reserve Chair Jerome Powell later on Wednesday for further cues on the bank’s stance on interest rates.
At the time of writing, the three-month copper contract on LME was at $9,098.50 per ton, down 0.3% from the previous close.
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