Rio Tinto (NYSE: RIO) has made important strategic decisions aimed at diversifying into critical minerals necessary for the energy transition, including lithium and bauxite. Rio Tinto operates as a vertically integrated mining company—managing the entire value chain from exploration and extraction to processing and export. This structure enables efficient cost management, quality assurance, and responsiveness to shifts in global demand.
Iron Ore represents the primary business segment, providing the largest portion of Rio’s revenue. Iron Ore, predominantly sourced from Western Australia, continues to deliver dependable cash flow due to the demand from steel production, especially from markets like China, India, and Southeast Asia. The demand for aluminum is increasing because of its significance in lightweight transportation, construction, and packaging, particularly in low-carbon variants. Separately, if you seek potential upside with a smoother experience than investing in an individual stock, consider the High Quality portfolio, which has surpassed the S&P, achieving returns greater than 91% since its inception.
The worldwide transition towards decarbonization is driving a substantial demand for lithium and copper. Lithium is essential for batteries in electric vehicles and grid storage. Copper is utilized in electric vehicles, as well as solar and wind infrastructure, and overall electrification. Rio Tinto’s growth opportunities in 2025 are focused on major global trends such as clean energy, electrification, and sustainable infrastructure.
In terms of lithium, the company plans to invest up to $900 million for a 49.99% stake in the Maricunga lithium project, collaborating with Chile’s state-owned Codelco. This project seeks to employ direct lithium extraction (DLE) technology, noted for being more eco-friendly, although it is still unproven at a commercial scale. Moreover, in March 2025, Rio Tinto finalized its $6.7 billion acquisition of Arcadium Lithium, which strengthens its position in the global lithium marketplace.
Rio Tinto anticipates a 50% increase in copper production from the Oyu Tolgoi mine in 2025, targeting output of 110,000–150,000 tonnes, up from 73,000 tonnes in 2024. This growth is crucial to Rio Tinto’s objective of reaching 1 million metric tons of annual copper production by 2030.
RIO is a metals and mining corporation that has shown significant resilience and expansion following the COVID pandemic. While it represents a solid investment, if you prefer even lower volatility while still enjoying potential gains, consider the High Quality portfolio, which has outperformed the S&P 500 and realized returns exceeding 91% since its establishment.
We estimate Rio’s valuation at $80 per share, indicating a solid nearly 29% upside potential. At its present price of $62, Rio stock is priced at just 8 times its trailing earnings. This reflects a discount in comparison to the company’s average P/E ratio of 10 over the last five years.
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