Rio Tinto plc: Feedback from Barclays European Leadership Conference: At the nexus of global capex

Research evidence excerpt

Rio Tinto plc: Feedback from Barclays European Leadership Conference: At the nexus of global capex

Barclays | Rio Tinto plc

•• Asset sales and infra sell-downs: Of the $5-10bn asset sale proceeds target, the aim is to

achieve $5bn by the end of CY26 and the balance in 2027. The sale of Borates is advancing

well, helped by good market conditions and strong buyer interest (per recent

media reports) with a conclusion possible by 1H26 results, according to Rio. The process for

RTIT is slower due to still very weak TiO2 market conditions and the more complex multi-

jurisdictional asset base (Canada, South Africa & Madagascar). Rio continues to evaluate the

optimal value propositions for infrastructure asset sales. The bigger-picture strategy is to

focus the business on the core commodity beneficiaries of global

capex megatrends (electrification, AI, defence) and exit smaller, more peripheral divisions.

•• Capital allocation: Capex is guided at $11bn in 2026-27, declining to $10bn thereafter with

the precise level dependent on the cadence of major project FIDs. Rio expects its balance

sheet to strengthen prospectively through a combination of organic volume growth (3%

CAGR 2024-30), progressively declining capex, higher commodity prices and asset disposals –

which combined could open up potential for additional cash returns in time. In response to

the inevitable question on buying back PLC stock, Rio flagged that it effectively made a

statement jointly with Chinalco at the CMD that "we're actively working with Chinalco around

solutions [to] that constraint and what that would look like." This is seen as representative of

an improving relationship between the two companies, also highlighted by the proposed