Rio Tinto to Seek Opportunities Beyond Own Operations

Rio Tinto (NYSE:RIO) is moving away from its century-old business model. Instead of solely digging up and marketing its own output, the second-largest global miner plans to scale up third-party commodity trading and the use of financial derivatives. Bloomberg reported the news, citing people familiar with the strategy change. After multiple rounds of failed merger talks with Glencore, the firm, under new CEO Simon Trott, will try to build the acumen it sought to gain through the merger. Trott, who recently marked his first anniversary at the helm, pledged to build a "stronger, sharper and simpler Rio Tinto." The aim is to squeeze higher margins, boost agility and monetize spare capacity across a global footprint spanning iron ore in Western Australia, copper in Mongolia and aluminum in North America. Expanding the Trading Floor Chief Commercial Officer Bold Baatar will lead the effort from Singapore, where the firm currently has 20 traders, with several specialist hires planned. Areas of focus include rebalancing alumina surpluses and deficits, addressing spare smelting capacity in North America, and expanding trading in copper cathode and sulphuric acid. Rio is also in talks with Vitol Group over a potential freight and logistics joint venture. Unlike Trafigura or Glencore, the firm won’t take directional bets on prices; it will use derivatives to hedge commercial positions and manage risk. “Marketing equity tons from our own operations to meet the needs of customers and partners remains the foundation of Rio Tinto’s business,” the company said in a statement. The company didn’t disclose financial targets for the expansion or the volume of third-party material it expects to trade. The Trott Playbook Since taking charge in August 2025, Trott has overhauled group strategy around capital discipline, portfolio simplification, asset sales and cost cuts. He has also navigated decarbonization challenges, securing subsidized clean power for the Tomago and Boyne aluminum smelters amid Australian constraints. He called the 2030 emissions goal “aggressive,” adding: “It is not at any cost, we have got to create value along the way.” Trott is also dismantling historic rivalries in favor of asset sharing, warning that Australia is struggling to remain in the “top quartile” of global investment destinations amid lagging productivity. The latest collaboration with BHP (NYSE:BHP) includes processing ore from BHP’s Yandi mine at Rio plants, BHP support for developing Rio’s Wunbye deposit, and jointly mining the Mungadoo Pillar separating adjacent sites. “In general, we’ve got to make sure we continue to reform, continue to drive productivity, continue to ensure Australia has competitive energy,” he told The Australian Financial Review. Asked about further projects with BHP, which already shares the Escondida mine and the planned Resolution copper venture, Trott responded positively. “I hope so. Ultimately, I am ambitious for Rio, we want to create value, and that means working with others,” he clarified. Image: Shutterstock