BofA-Rio Tinto Ltd Q2 production inline. Eyes on copper iron ore. Guidance unchanged.-20250716

Solid copper growth. Iron ore recovers post weather.

Q2 production broadly inline. Key commodities iron ore, copper and aluminium broadlyinline, ahead of consensus. Guidance remains unchanged. Key takeaways: 1) Copperand bauxite guiding to top end of production. Good performance from Oyu Tolgoi as itramps up. 2) Unit cost guidance unchanged, copper costs better than consensus andcompany guides to lower end of guidance. 3) Bringing forward first shipments fromSimandou to November 2025. 4) Lithium integration progressing to plan. The companyalso announced Simon Trott to take on role of CEO from 25th August. Model: We makeno changes to model. PO A$150/share, based on 1x P/NPV. RIO Ltd trades on c. 0.8xP/NPV and offers exposure to our bullish views on Aluminium & Copper.

Eyes on Simandou acceleration

Iron ore production was light in Q1 due to cyclone impact. Pilbara iron ore sinceachieved a record quarter, recovering from extreme weather impacts. SP10 levelsaccounted for 29% of Pilbara shipments, and should trend back to c.20%. Even as themarket is focussed on “future facing commodities” like copper & lithium, RIO’s Pilbarairon ore business continues to “print” money. Eyes now on Simandou. First shipmentaccelerated to around November 2025, 0.5 to 1.0Mt of shipments expected this year.