Rio Tinto Group RIO announced that it will cut production by 40% at its Yarwun Alumina Refinery in Gladstone from October 2026. This move will help Rio Tinto to extend the operation’s life until 2035.
Rio Tinto has previously explored options for a second tailings facility for Yarwun, which requires a significant investment. This is not economically viable for the company currently.
The reduction of production will give the company time to explore further life-extension and modernization options at Yarwun. As Yarwun’s tailings facility is expected to hit capacity by 2031, the curtailment gives Rio Tinto four years to find solutions for prolonging the refinery’s life. The reduction of production will further allow the company’s alumina operations to continue through 2035. Rio Tinto’s other facilities, including its bauxite mines and aluminium smelters, will continue operating at full capacity.
As a result of this production cut, RIO’s alumina production will be lowered by 1.2 million tons annually. It will not impact customer requirements. The company currently produces around 3 million tons of alumina annually.
The decision will also impact 180 roles. However, the company is exploring redeployment options across Rio Tinto’s Gladstone sites.
RIO expects Pilbara iron ore shipments (100% basis) at the lower end of 323-338 Mt. This is due to cyclone impacts in the first quarter of 2025.
Backed by the better-than-expected performance, the company has increased Bauxite’s guidance to 59-61 Mt from the prior stated 57-59 Mt. This indicates higher utilization rates, particularly at Weipa.
Alumina production is anticipated between 7.4 Mt and 7.8 Mt, while aluminum production is expected to be 3.25-3.45 Mt for 2025. Copper output is predicted to be at the higher end of the earlier stated 780-850 kt. Titanium dioxide slag production is expected to be near the lower end of 1-1.2 Mt.
In the past year, shares of Rio Tinto have gained 18.5% compared with the industry’s 14.2% growth.
Image Source: Zacks Investment Research
Rio Tinto currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the basic materials space are OR Royalties Inc. OR, Newmont Corporation NEM and First Majestic Silver Corp. AG. While OR and NEM sport a Zacks Rank #1 (Strong Buy) at present, AG carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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