Fund Manager Summary
The fund managers believe that the outlook for Rio Tinto Ltd presents both challenges and opportunities. Despite experiencing a 9% decline in iron ore shipments due to weather disruptions in the Pilbara, they maintain that guidance remains intact. In their opinion, the operational volatility has negatively impacted the share price, currently around $110.75. Additionally, there is caution regarding China demand, which has exerted downward pressure on iron ore prices. Nevertheless, the fund managers see potential for recovery as market conditions stabilize, suggesting that investors might find value in the stock if macroeconomic factors improve.
Source: Trading View
Commentary From The Managers
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Pendal Group
24 Nov 2025
$129.31
Summary
- Pendal Group notes Rio Tinto's recent announcement of a 1.2 million-tonne-per-annum cut to alumina production at Yarwun, Queensland.
- The 40% cut accounts for 18% of Rio's total production, aimed at addressing tailings capacity issues projected for 2031.
- This strategic decision allows an additional four years to explore potential solutions for tailings management.
- While the impact on Rio's earnings is negligible due to current depressed market conditions, it may positively influence alumina pricing.
- Non-China alumina demand stands at approximately 60 million tonnes globally, indicating potential for improved pricing dynamics.
- Additionally, this move may influence the decision regarding the closure of the Tomago aluminium smelter, as current power offers are significantly unfavorable.
- Pendal Group continues to hold its position in Rio Tinto, reflecting confidence in the company's strategic adjustments amid market challenges.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
24 Nov 2025
$129.31
- Pendal Group notes Rio Tinto's recent announcement of a 1.2 million-tonne-per-annum cut to alumina production at Yarwun, Queensland.
- The 40% cut accounts for 18% of Rio's total production, aimed at addressing tailings capacity issues projected for 2031.
- This strategic decision allows an additional four years to explore potential solutions for tailings management.
- While the impact on Rio's earnings is negligible due to current depressed market conditions, it may positively influence alumina pricing.
- Non-China alumina demand stands at approximately 60 million tonnes globally, indicating potential for improved pricing dynamics.
- Additionally, this move may influence the decision regarding the closure of the Tomago aluminium smelter, as current power offers are significantly unfavorable.
- Pendal Group continues to hold its position in Rio Tinto, reflecting confidence in the company's strategic adjustments amid market challenges.
Summary
Wilson Asset Management
31 Oct 2025
$132.87
- Rio Tinto is a diversified mining company producing iron ore, aluminium, copper, and other critical minerals globally.
- During the month, Rio Tinto’s share price performance was supported by a strong copper price amid global supply disruptions.
- The company reported solid quarterly earnings, showing strong production and shipments across commodities.
- Bauxite production guidance was upgraded, reflecting higher utilisation rates, especially at Weipa, which exceeded nameplate capacity.
- The first ore was loaded at the Simandou mine for movement down the rail, with ramp-up remaining on track.
- Wilson Asset Management continues to hold Rio Tinto due to its pipeline of potential catalysts and improving sentiment toward China.
- Valuations remain attractive, as the current share price implies a significant discount to the current iron ore spot and midcycle commodity price.
Summary
Wilson Asset Management
30 Sept 2025
$122.03
- Rio Tinto is a diversified mining company producing iron ore, aluminium, copper, and other critical minerals globally.
- Strong performance in September driven by key commodity exposures and new policy signals from the Chinese government.
- China Mineral Resources Group blocked iron ore purchases from BHP Group, positively impacting Rio Tinto’s iron ore pricing environment.
- Stronger relations with China due to their joint venture in Simandou, significant given global iron ore demand influenced by Chinese policies.
- Supply chain interruptions in the industrial metals sector supported aluminium and copper prices, offering further upside for Rio Tinto.
- Company’s share price assumes an iron ore price well below the current market price, indicating potential value.
- Wilson Asset Management continues to hold Rio Tinto due to its strong market position and competitive advantages.
Summary
Ten Cap
30 Sept 2025
$122.03
- Ten Cap continues to hold Rio Tinto (RIO) due to elevated iron ore prices.
- The shutdown of Grasberg has resulted in a significant increase in copper prices.
- These commodity tailwinds have materially improved earnings for Rio Tinto.
- Rio Tinto is implementing a strategic shift to refocus on core commodities.
- The company is streamlining operations to reduce future earnings risk.
Summary
Alliance Bernstein
30 June 2025
$107.13
- Alliance Bernstein notes that Rio Tinto's share price has been negatively impacted by the announcement of the CEO’s departure.
- Market reaction included significant pressure on share price due to a softer iron-ore price.
- Increased tensions with the Mongolian government regarding a key copper project have also contributed to the challenges faced by the company.
- Despite these challenges, Alliance Bernstein continues to evaluate the long-term potential of Rio Tinto.
Summary
First Sentier Investors
30 June 2025
$107.13
- Rio Tinto declined by 7.2% due to a softer production report and ongoing volatility in industrial commodity prices.
- Severe weather disruptions significantly impacted operations, particularly in the Pilbara, with iron ore shipments down 9% compared to 1Q24 at 70.7Mt.
- Full-year shipment guidance has been revised to the lower end of the range.
- Record production was achieved at RIO’s Oyu Tolgoi copper mine and bauxite operations.
- A landmark joint venture with Chile’s Codelco was announced to develop the high-grade Salar de Maricunga lithium project, committing up to US$900 million in staged funding.
- This strategic move supports RIO’s ambition to develop their portfolio of critical minerals essential for the energy transition.
- In iron ore, RIO and Hancock Prospecting approved a US$1.6 billion investment in the Hope Downs 2 project, with first ore targeted for 2027.
Summary
Ten Cap
31 May 2025
$110.75
- Weather disruptions in the Pilbara affected Rio Tinto's operations, resulting in a 9% decline in iron ore shipments.
- Despite the decline, guidance remains intact, indicating confidence in future performance.
- Operational volatility has put downward pressure on the share price.
- Investor sentiment is cautious regarding China demand, contributing to the downward trend in iron ore prices.
- Ten Cap continues to hold its position, reflecting a belief in the company's long-term fundamentals despite short-term challenges.
Summary
Montgomery Investment Management
31 Aug 2023
$112.90
- Rio Tinto (ASX:RIO) was a top contributor to The Fund’s performance in FY2023, supported by a strong iron ore price.
- Current earnings are primarily driven by low-cost iron ore operations.
- The company is shifting towards clean energy minerals, increasing investments in copper and lithium.
- Oyu Tolgoi, a significant copper deposit, is 66% owned by Rio Tinto and has a lifespan of at least 50 years.
- This aligns with the anticipated global copper shortage.
- Growing decarbonisation movement is expected to boost demand for clean energy minerals, crucial for electric vehicle and renewable energy storage.
- If management successfully executes expansion plans, there may be additional upside potential not yet reflected in the share price.
- Rio Tinto’s iron ore operations are likely to benefit from increasing demand for housing and energy infrastructure.
- As a result, Rio Tinto has been moved to maximum weight in The Fund’s portfolio.
- It remains one of Montgomery Investment Management's chosen resource exposures at the end of the financial year.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"Operational volatility seems to be casting a shadow over Rio Tinto's outlook, as weather disruptions and cautious sentiment around China are putting pressure on iron ore prices. Investors may want to brace for continued turbulence as the market recalibrates."
Last Updated: 24 Nov 2025
Query The Data
Frequently Asked Questions
Who is investing in Rio Tinto Ltd (ASX:RIO)?
Fund managers including Ten Cap, First Sentier Investors, Montgomery Investment Management, Alliance Bernstein, Wilson Asset Management and Pendal Group have invested in Rio Tinto Ltd (ASX:RIO).
Why do fund managers invest in Rio Tinto Ltd?
Fund managers invest in Rio Tinto Ltd due to its strong operational fundamentals, despite recent challenges like weather disruptions and cautious demand from China impacting iron ore prices. The company's guidance remains stable, indicating potential for recovery and resilience in the face of macroeconomic pressures.
What happened to Rio Tinto Ltd (ASX:RIO)?
Fund managers are investing in Rio Tinto Ltd due to its strong positioning in the diversified mining sector, particularly in iron ore and copper, amid favorable market conditions. Recent comments highlight the positive impact of elevated iron ore prices and supply disruptions in copper, alongside strategic operational streamlining. The company benefits from improved relations with China, especially through its joint venture in Simandou, which enhances its market position. Additionally, Rio Tinto's attractive valuations suggest significant upside potential compared to current commodity prices, reinforcing its appeal as a core investment.