Rio Tinto reports record iron ore quarter and soaring copper production
Rio beats copper forecasts by 11% as Oyu Tolgoi ramps up and iron ore achieves record quarterly production despite earlier setbacks.
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Mentioned
KEY POINTS
- Copper production of 240kt in Q4 beat analyst estimates by 11% as the Oyu Tolgoi underground project completed its ramp-up, with full-year output of 883kt exceeding the top end of upgraded guidance.
- Pilbara iron ore operations achieved record quarterly production of 89.7Mt and shipments of 91.3Mt, recovering strongly from earlier weather disruptions to finish within full-year guidance.
- Copper concentrate market conditions reached all-time lows with treatment charges at negative $68 per tonne and 2026 benchmark at $0 per tonne, providing margin advantages for integrated producers.
Rio Tinto (ASX: RIO) closed out 2025 with a strong performance across its diversified portfolio, beating market expectations on several key commodities as major project investments come online.
The miner reported 8% growth in copper equivalent production for the full year, driven by record copper output and a significant lift in bauxite production. The company shipped its first ore from its massive Simandou project in Guinea during the December quarter, marking a major milestone for one of the world's largest undeveloped iron ore deposits.
Production Performance
The December quarter was exceptionally strong across all commodities, particularly copper. Full year production broadly met company guidance, with stronger-than-expected bauxite and copper output.
December Quarter 2025
Production | Q4 2025 | vs. Q4 2024 | vs. Ests |
|---|---|---|---|
Pilbara iron ore production (Mt) | 89.7 | +4% | 87.7 (2% beat) |
Pilbara iron ore shipments (Mt) | 91.3 | +7% | 88.1 (4% beat) |
Copper (kt) | 240 | +5% | 217 (11% beat) |
Bauxite (Mt) | 15.4 | 0% | 14.6 (5% beat) |
Alumina (Mt) | 2.0 | -1% | 1.93 (4% beat) |
Aluminium (Mt) | 0.85 | +2% | 0.84 (1% beat) |
Full Year 2025
Production | 2025 | vs. 2024 | 2025 Guidance |
|---|---|---|---|
Pilbara iron ore production (Mt) | 327.3 | - | NA |
Pilbara iron ore shipments (Mt) | 326.2 | -1% | 323-338 |
Copper (kt) | 883 | +11% | 860-875 |
Bauxite (Mt) | 62.4 | +6% | >61 |
Alumina (Mt) | 7.6 | +4% | 7.4-7.8 |
Aluminium (Mt) | 3.38 | +3% | 3.25-3.45 |
Iron ore bounces back
The record quarterly production marks a strong recovery from weather disruptions earlier in the year, with Pilbara operations delivering their strongest quarterly performance despite earlier setbacks.
Rio Tinto noted that China's domestic steel consumption held steady quarter-on-quarter, while the country's net steel exports (including semi-finished products) remained above 120 million tonnes annually.
Seaborne iron ore supply from non-major producers jumped approximately 10% both quarter-on-quarter and year-on-year, though Chinese port inventories climbed 21 million tonnes during the quarter to 166 million tonnes.
Copper delivers standout performance
Copper production was the standout, beating fourth-quarter analyst expectations by 11% and exceeding the company's full-year guidance by 6%. Results reflect the successful ramp-up of the Oyu Tolgoi underground project in Mongolia and position Rio Tinto to capture strong copper fundamentals, with London Metal Exchange prices closing the year at US$5.67/lb, supported by anticipated demand from artificial intelligence infrastructure and ongoing supply disruptions.
The concentrate market remains exceptionally tight, according to Rio Tinto. Spot treatment and refining charges plunged to negative US$68 per tonne during the quarter, while the 2026 annual benchmark settled at $0 per tonne, both at all-time lows. This dynamic should support margins for integrated producers like Rio Tinto.
Aluminium value chain shows strength
The record annual bauxite output reflects what management described as a "step change" in production through operational excellence.
LME aluminium prices averaged their highest level since mid-2022 during the quarter, supported by expectations of a tighter global balance and low inventory levels. Rio flagged that Australian alumina prices continued to fall on higher Indonesian and Chinese production and elevated Chinese stock levels.
Lithium gains traction
Rio Tinto achieved record quarterly lithium production from its operating assets in Argentina, contributing to planned growth across its lithium portfolio. The company stressed that it is building out its lithium business "with discipline" as the market recovers.
Lithium carbonate prices surged 55% in the December quarter, driven by growing optimism around battery energy storage systems and strong Chinese shipment activity. Global electric vehicle sales continued rapid growth, prompting upgrades to lithium demand expectations across the sector.
The bottom line
The results demonstrate Rio Tinto's ability to execute on major projects while extracting improved performance from existing operations. It's probably why Rio Tinto is the best performing major in the past twelve months, up 22% vs. BHP (+18%) and Fortescue (+14.6%).
The Oyu Tolgoi ramp-up removes a key execution risk and positions the company to benefit from structural copper demand growth. Meanwhile, the Simandou first shipment is significant given the project's potential to add material production volumes, though investors should note the asset is still in early stages with full ramp-up ahead.
At its Capital Markets Day in December, Rio Tinto said it is targeting compound annual production growth of 3% to 2030, which it forecasts will boost EBITDA growth by 40-50% by 2030. The miner now stands at an inflection point, with major projects ramping up just as commodity fundamentals just keep getting better.
