Rio Tinto Completes the Acquisition of 11.65% Stake in Boyne Smelters
Rio Tinto RIO has completed its previously announced acquisition of the 11.65% interest in Boyne Smelters Ltd (“BSL”) from Mitsubishi Corporation MSBHF.
BSL is located at Boyne Island in Central Queensland and is Australia’s second-largest aluminum smelter. This transaction takes Rio Tinto’s ownership of BSL to 71.04% while Mitsubishi will no longer have any stake in the same.
Rio Tinto to Increase Stake in BSL to 73.5%
On May 31, Rio Tinto agreed to acquire a 2.46% share in BSL that was held by Sumitomo Chemical Company Limited (“SCC”), which is part of Sumitomo SSUMY.
With the recent acquisition of Mitsubishi's 11.65% stake and the finalization of the transaction with SCC, Rio Tinto will have a majority stake (73.5%) in the joint venture. The remaining will be held by YKK Aluminium (9.50%), UACJ Australia (9.29%) and Southern Cross Aluminium (7.71%).
Boyne Smelters has been operating for more than four decades. Investments made in the operations over the past years have increased its annual capacity from 210,000 tons of aluminum to the current capacity of more than 500,000 tons of aluminum. BSL also continues to invest in a range of technologies, including automation projects, while exploring ways to be more energy efficient.
The facility’s activities include manufacturing carbon anodes in the carbon plant, producing aluminum (smelting) in reduction lines and casting molten metal into aluminum products that are ready for shipping. The smelter is connected through a conveyor belt to the Queensland Alumina Limited Refinery to ensure a seamless supply of alumina.
Rio Tinto Expects Aluminium Production in FY24 to Rise 1%
Rio Tinto produces some of the highest quality, lowest-carbon footprint aluminum in the world. The company’s share (then 59.4%) of aluminum production from BSL was around 295 Kt in 2023 and 150 Kt in the first half of 2024.
Rio Tinto produced 1,650 kt of aluminum in the first half of 2024, 52% lower than the prior year period. The company expects aluminum production to be between 3.2 Mt and 3.4 Mt in 2024. The range indicates a 1% improvement at the midpoint compared with 3.27 Mt of aluminum produced in 2023.
Rio Tinto Stock’s Price Performance
In the past year, shares of Rio Tinto have gained 14.7% compared with the industry’s 11% growth.
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RIO’s Zacks Rank and a Stock to Consider
Rio Tinto currently carries a Zacks Rank #3 (Hold).
A better-ranked stock from the basic materials space is Carpenter Technology Corporation CRS, which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.
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