Rio Tinto shares jumped on Wednesday after the miner announced record fourth-quarter production amid ongoing merger talks with Glencore.
The mining giant achieved an 8% year-on-year increase in copper production, supported by record bauxite output and strong contributions from its lithium operations.
The company’s Pilbara iron ore operations hit a record in the fourth quarter, with production up 4% and shipments rising 7% compared to the previous year.
Copper production was also a bright spot, climbing 11% year-on-year to exceed the top end of the company’s upgraded guidance range. This was driven primarily by the successful ramp-up of the Oyu Tolgoi mine in Mongolia, where the underground development project has now been completed.
The lithium division delivered impressive results, with operations in Argentina posting record quarterly production from existing assets.
Strong production numbers are released against a backdrop of Glencore merger talks that could create the world’s largest miner.
“Rio Tinto’s latest production update was rock solid, but it has been somewhat overshadowed by renewed chatter around a potential mega-merger with Glencore,” said Mark Crouch, market analyst at eToro.
“A deal of that scale would send shockwaves through the global mining sector and leave investors salivating. While a deal remains a long way off, the speculation has reignited interest in a sector already enjoying its strongest performance in years.
“With talk of a commodity supercycle not going away, combined with low energy costs, Rio Tinto may not see conditions this favourable again.”