What happened?
RIO released the slide deck ahead of the 8am (UK time) kick-off of its 2024 Investor Seminar. On the guidance front, there were small, positive tweaks to 2024. 2025 was presented for the first time and is slightly light (-2%) on iron ore shipments vs consensus but in-line on copper, an area where there had been some concern given recent underperformance. Mid-term capex guidance has been lifted by USD 1bn per annum, above prior guidance, and current consensus.
BNPP Exane View:
2024 production guidance was largely unchanged. The Bauxite range was kept at 53-56Mt but is now expected to exceed the top end of guidance (consensus 57Mt) vs previously expecting to be around the top end. Alumina''s range of 7.0-7.3Mt is now expected to be around the top end of the range (consensus 7.1Mt).
2025 guidance has been released and there are several puts and takes. 2025 Pilbara shipments (100% basis) is guided to 323-338Mt, the mid-point of which is -2% vs Visible Alpha consensus. Mined copper, where we believe there was some sense of concern amongst investors given recent underperformance, was guided to 780-850kt and was in-line with consensus at the mid-point. The full breakdown relative to BNPPE and consensus can be found in the exhibit below. Moving forward, RIO is no longer providing guidance separately on mined vs refined copper.
Capex guidance has been refreshed with mid-term now seen at USD 10-11bn (cUSD 10bn prior). 2024 is expected at USD 9.5bn (in-line with consensus) and 2025 at USD 11bn (cons 10.2bn). Within that, growth capex of USD 3bn per annum remains, albeit a growing majority in 2026 and 2027 is now currently unallocated.
The Winu copper-gold project has found a partner in Sumitomo Metal Mining (SMM) as the latter will pay USD 399m for a 30% equity share of the project (USD 195m up front and USD 204m deferred). The project, located in Western Australia, was discovered in 2017 and is expected to complete a pre-feasibility study in...
