Rio Tinto Expands Marketing Arm for Metal Trading
Rio Tinto is expanding its marketing arm to focus on trading more metal, according to Bloomberg. The company's commercial team will use their existing infrastructure to make money from processing and regional price differences, not just copper prices.
The mining giant has spare smelting capacity at its Kennecott operations in Utah, which can be used to handle more copper cathode and related by-products like sulfuric acid. This would allow Rio Tinto to earn extra margin from fees, logistics, and timing.
Rio Tinto plans to use derivatives to hedge against fluctuations in the copper price, ensuring a steadier volume-and-margin operation. Analysts may start to model the North American copper business more like this, changing how investors think about its volatility and reliability of cash flows.