Rio Tinto: 5 priorities for the incoming CEO Report

Insight 27 June 2025

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Report summary

Rio Tinto's CEO steps down in H2 2025. His successor inherits strong fundamentals but a 40% discount to NAV versus peers. Five strategic priorities must be addressed: 1) Chinalco stake limits constraining buybacks 2) Operational excellence - closing US$7/tonne margin gap with BHP could add US$1bn annual EBITDA 3) Capital allocation with largest investment programme in peer group 4) Potential Glencore merger to fill post-2028 copper gap 5) Decarbonisation strategy - spending to meet 50% emissions cut by 2030 with reduced 7% capex budget. Decisive action is needed across all five priorities to close the valuation gap.

Executive Summary
- Rio Tinto has a strong platform for growth, but closing the valuation discount must be a priority
- 1. Resolve the impediment to buybacks
- How would abandoning the DLC resolve this?
- Are there alternative solutions to dilute Chinalco’s PLC holding?
- 2. Close the margin gap with peers
- Are there opportunities to reopen the operational efficiency playbook?
- Is portfolio rationalisation still an option?
- 3. Refocus on capital discipline
- 10 more item(s)...