Rio Tinto Forges Strategic Copper and Lithium Alliance in Chile

Rio Tinto pivots to organic growth & a major Chile partnership with Codelco after Glencore deal collapse, backed by strong 2025 EBITDA of $25.4B and rising copper output.

Mining heavyweight Rio Tinto is charting a clear course for growth, pivoting decisively toward organic expansion and strategic partnerships following the collapse of its potential merger with Glencore. The company has now entered a significant alliance with Chile's state-owned mining champion, Codelco, aiming to dramatically scale up copper and lithium production in one of the world's most critical mineral regions to meet soaring demand from the global energy transition.

Financial Performance Provides Solid Foundation

This strategic shift is backed by robust operational and financial results. For the 2025 fiscal year, Rio Tinto reported a 9% increase in its underlying EBITDA to $25.4 billion, a figure that modestly exceeded market expectations. The copper division was a primary contributor, with production rising by 11%. This surge was powered largely by a remarkable 61% performance improvement at the now fully operational Oyu Tolgoi underground mine in Mongolia.

Investors have responded favorably to this trajectory. Since the start of the year, Rio Tinto's share price has advanced by nearly 22%, currently trading at €84.34. This places it just below its 52-week high of €85.60.

Deepening Partnership with a Global Copper Leader

The recently signed Memorandum of Understanding (MoU) between Rio Tinto and Codelco—the world's largest copper producer—signals a major deepening of their existing relationship. The collaboration will focus on identifying joint investment opportunities, shared operational management, and supply chain optimization. A newly established steering committee has been tasked with pinpointing specific pilot projects.

CEO Simon Trott highlighted Chile as a cornerstone of the company's growth strategy. The two firms are already collaborating on the "Nuevo Cobre" copper project. Furthermore, Rio Tinto recently underscored its commitment by investing $900 million to acquire a 49.9% stake in a lithium venture at the Maricunga salt flat. This move exemplifies the company's strategic pivot away from pursuing mega-mergers, such as the potential $260 billion deal with Glencore which was definitively terminated in early February, and toward the targeted development of its own assets.

Aggressive Growth Carries a Financial Cost

The push for expansion has had a measurable impact on the company's balance sheet. By year-end, net debt had risen significantly to $14.4 billion. This increase was driven by capital expenditures totaling $12.3 billion, which included the acquisition of Arcadium Lithium. To reinforce its financial position, management is currently evaluating the sale of its borates and titanium dioxide businesses. These divestments could generate proceeds estimated between $5 billion and $10 billion.

Dividend Commitment and Future Targets

Despite substantial ongoing investments, Rio Tinto remains committed to its shareholder returns policy, confirming it will again distribute 60% of its underlying earnings as dividends. Operationally, the company's goals are ambitious: it aims to increase its annual lithium production capacity to 200,000 tonnes by 2028. For income-focused investors, a key near-term date is March 6, 2026, when the shares will begin trading ex-dividend.