River Tinto shifts its approach and begins to trade metals sourced from other mining companies.

Rio Tinto intends to expand its business operations by trading additional metals from other producers and derivatives, as part of the new CEO’s efforts to enhance the company’s agility.

Rio is the world’s second-largest mining company, conducting operations in various locations including Western Australia for iron ore, Mongolia for copper, and North America for aluminum.

The company historically did not engage in significant trading activities and did not fully capitalize on all aspects of the business as successfully as some competitors, a situation that the chairman and CEO aim to improve.

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Rio’s shortcomings became apparent during two rounds of talks in the last two years to acquire Glencore Plc, a mining competitor with significant trading activities in energy, metals, and electricity markets.

Glencore’s combined trading networks and business expertise, along with its valuable copper assets, were significant factors that interested Rio. The discussions were later halted.

Rio is not looking to imitate the major independent traders in the industry but aims to bring about a substantial transformation in the current business under the leadership of commercial director Bold Baatar.

The miner will increase business with other companies, a departure from the current focus on selling their own production, which is typically handled by specialized traders who often purchase commodities instead of extracting them.

Rio views the change as a means to increase profits from assets rather than establishing a separate trading operation, according to sources.

The company has surplus alumina in certain regions and a shortage in others. Rio is also exploring potential trading possibilities in the North American copper market, leveraging unused casting capacity in Kennecott’s operations to produce copper cathodes and associated products like sulfuric acid.

The company is prepared to utilize financial derivatives for hedging positions and exposures, rather than speculating on commodity price movements, according to sources.

Rio Tinto stated that marketing their own operations to fulfill the requirements of customers and partners is fundamental to their business. They also mentioned expanding their capacity to trade products for third parties.

We see this as a chance to create more value by fully utilizing infrastructure, streamlining our production processes, and providing increased flexibility to customers.

The company declined to provide additional comments on the plans.

Rio established a marketing center in Singapore in 2018 to shorten the distance from competitors BHP Group and Anglo American, who had more concentrated marketing operations.

These efforts came to a halt amid the pandemic, with Anglo intensifying this approach in 2024 when it encountered a takeover bid.

Under the leadership of Trott, who became CEO last year, Rio has put forth strategies to streamline operations, divest assets, and cut expenses while aiming to boost operational profits.

The company is already in talks with Vitol Group, a major player in the oil trading industry, to establish a partnership in freight and logistics, as reported by Bloomberg in June.

Rio’s commercial team has around 20 traders at present and intends to recruit additional staff, according to sources. The financial performance of the department will not be revealed externally, but will be evaluated internally.