Rio Invests in Infrastructure to Boost Profits

Overvalued mining stock Rio Tinto has invested in autonomous trains to speed up delivery and improve revenues

Mathew Hodge 21 June, 2018 | 7:31AM

Iron ore mining miner stock equities Rio Tinto Australia mine

With our lower forecast iron ore prices, a function of expected declining iron ore demand in China, we forecast iron ore's contribution to Rio Tinto’s (RIO) earnings to fall. However, we still expect the business to make up about one third of earnings by 2022 and be Rio Tinto's largest single source of income.

Volume guidance is reaffirmed. Rio Tinto aims to ship 330 to 340 million tonnes of iron ore in 2018 and expects system capacity to reach 360 million tonnes by the end of 2019. The ramp-up schedule is in line with our expectations.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Rio Tinto PLC5,007.00 GBX0.34

About Author

Mathew Hodge  is an equity analyst for Morningstar

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