Nation 'much more than a market' for Rio Tinto

Global mining giant Rio Tinto views China as far more than just its largest market, CEO Simon Trott said, describing the nation as a "very significant strategic partner" across its worldwide operations.

"China, the largest consumer of metals in the world as well as the largest importer of seaborne iron ore, remains a very strong market for us, and will be one of our key focus areas going forward," Trott said.

"China is much more than a market. We purchase significant materials that we use in our own business. We work with partners from China all around the world in our operations, as we look at ways of strengthening our business."

The nation accounted for a commanding 55.2 percent of the mining giant's total revenue in the first half of this year, solidifying its position as Rio Tinto's largest customer.

As a crucial sourcing partner, procurement from the country exceeded $4.2 billion last year, reflecting a deepening economic interdependence, according to the Anglo-Australian firm.

China's upcoming 15th Five-Year Plan (2026-30), which is expected to accelerate new quality productive forces, provides massive opportunities for Rio Tinto, as the world-class Simandou iron ore project in Guinea is slated to produce its first ore this year.

The Western Range project, a significant iron ore mine in Australia that is a joint venture between Rio Tinto (54 percent) and China Baowu Steel Group (46 percent), was recently put into operation, serving as a cornerstone of the long-standing resource partnership between Australia and China.

According to Rio Tinto, these projects are pivotal in supplying steady and high-quality iron ore to China's steel industry.

Crucially, the superior-grade iron ore from Simandou is expected to offer significant advantages to Chinese steelmakers, directly aiding their accelerated efforts to reduce carbon emissions within their energy-intensive operations.

Trott hailed the rapid progress of Simandou, where Rio Tinto is jointly developing alongside multiple Chinese companies, as "outstanding". He noted that the speed and efficiency with which Simandou is being built offer valuable lessons for the company's global operations.

China's role is deemed fundamental to global mining powerhouses such as Rio Tinto, according to industry observers.

Collaborative initiatives like Simandou provide stability for iron ore sales and help dilute investment risks for these international miners. For their Chinese counterparts, involvement in these joint ventures secures a consistent supply of high-quality, competitively priced iron ore, ensuring raw material stability and quality, and offering protection against potential future price escalations, said Xu Xiangchun, information director and analyst at iron and steel consultancy Mysteel.

Further underscoring this collaborative ethos, Rio Tinto has engaged in several other initiatives with Chinese partners in recent years, including a demonstration project for battery swap electric haul truck technology in partnership with State Power Investment Corp, and recently signed memorandums of understanding with three major Chinese design institutes.

"China is a strategic partner. These are examples of the work that we want to do together to strengthen our business, to contribute to the ongoing development of China."

The mining executive reiterated Rio Tinto's strong confidence in the Chinese economy's continued resilience and growth potential. This confidence underpins significant investment decisions, including over $15 billion in Western Australia's Pilbara region to replenish iron ore supply and investments across its copper, aluminum and lithium businesses.

"The 15th Five-Year Plan serves as the blueprint for the Chinese economy, as well as an insight for us in terms of how we need to think about our own business, and how we should think about our engagements with China," he said.

"Many of the aspects of the Five-Year Plan, which will drive innovation, technology and decarbonization, are areas we want to continue to partner with Chinese stakeholders right around the world in our global operations."