Copper Emerges as the New Engine for Rio Tinto

Rio Tinto's 2025 results show copper now drives 30% of earnings as analysts turn cautious. The miner maintains its dividend despite shifting market dynamics.

A significant strategic shift is underway at the Anglo-Australian mining behemoth, Rio Tinto. For decades, iron ore was the undisputed profit driver, but copper has now decisively taken the lead role. This transition comes even as market analysts adopt a more cautious stance, revising their outlooks downward despite the company posting solid annual results.

Analysts Exercise Caution Following Annual Report

The release of Rio Tinto's 2025 full-year financials prompted several major investment banks to adjust their recommendations. Barclays downgraded the stock from 'Overweight' to 'Equalweight', simultaneously reducing its price target from 6,885 to 6,600 pence. The bank cited a valuation discount compared to peers and strategic challenges for copper growth beyond 2030.

Similarly, Goldman Sachs moved to a Neutral rating, setting a price target of 7,400 pence. Deutsche Bank, UBS, and Berenberg all maintained their previously cautious assessments. The company's 2025 EBITDA came in at $25.4 billion, slightly exceeding the consensus estimate of $25.2 billion, while net debt reached $14.4 billion.

A Clear Shift in Revenue Composition

The financial data underscores this fundamental change. Copper now contributes approximately 30% to Rio Tinto's total earnings—double its share from just a few years ago. Meanwhile, iron ore, the group's traditional backbone, has receded from 70% to about 60% of total revenue.

Market dynamics are fueling this shift. Chinese steel production fell below the one billion tonne mark in 2025, dampening iron ore demand. Conversely, copper continues to benefit from its critical role in the global energy transition, despite facing its own market headwinds. London Metal Exchange copper futures are currently trading at $12,868.50 per tonne, representing an 11.4% decline from the January peak of $14,527.50. Iron ore prices also remain under pressure, standing at $98.46 per tonne.

Dividend Consistency and Insider Confidence

Amid these changes, Rio Tinto's commitment to shareholder returns remains unwavering. The board declared a total dividend of $6.5 billion for the 2025 financial year, equivalent to a 60% payout ratio. This marks the tenth consecutive year the company has achieved this distribution level. The final dividend was set at 254 US cents per share.

In a parallel development viewed as a signal of confidence, Director Ben Wyatt executed an insider purchase on February 23, acquiring 100 shares at a price of 160.62 Australian dollars each.