UBS Says Rio Tinto May Need to Expand Copper Mines, Argentina's Los Azules Could Fill the Gap

en.Wedoany.com Reported - Rio Tinto (LSE:RIO, ASX:RIO, OTC:RTNTF) may need to expand its copper mine project pipeline to avoid a growth gap after 2030, and Argentina's Los Azules project could be the solution. UBS made this assessment in its latest report.

UBS has a "neutral" rating on Rio Tinto with a target price of 7,300 pence. The report noted that benefiting from the Oyu Tolgoi and Kennecott projects, the miner is expected to increase copper production from 883,000 tonnes in 2025 to approximately 1 million tonnes by 2030. However, beyond that, UBS believes there are fewer clear options. The bank pointed out that Rio Tinto indeed lacks meaningful copper growth options in the medium term from 2030 to 2035, due to the long development cycles of projects such as Resolution, La Granja, and Nuevo Cobre, while the Winu project is relatively small in scale.

The Los Azules project could help fill this gap. Rio Tinto currently holds a 17% stake in this Argentine copper project, and in May this year, it was reported that the company was considering increasing its stake. UBS described Los Azules as a long-life, low-cost solvent extraction-electrowinning (SXEW) project, targeting first copper production in 2030. According to the 2025 feasibility study, the project could produce 205,000 tonnes of cathode copper annually in the first five years, with a C1 cost of $1.71 per pound, an all-in sustaining cost (AISC) of $2.11 per pound, and capital expenditure of approximately $3 billion.

Based on UBS's long-term copper price assumption of $5.50 per pound, the institution estimates Los Azules' value at approximately $5 billion, with an internal rate of return (IRR) of around 28%.