Despite Stronger Copper and Aluminum Prices, Iron Ore Still the Main Driver of Rio Tinto's Earnings

Rio Tinto is one of the world’s largest miners with operations in iron ore, aluminum (including bauxite and alumina), copper, and minerals (mineral sands, borates, salt, diamonds). Commodity demand is tied to global economic growth, China’s in particular. Rio Tinto benefited greatly from the China boom over the past two decades. The firm’s largest customer by far is China, with about 60% of sales in 2023. We think the outlook is for earnings to materially decline with demand for many commodities likely to soften with the end of the China boom, particularly iron ore which has disproportionately benefited from the boom in infrastructure and real estate investment.