Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets.

Rio Tinto’s 2025 result reads like a company leaning into its future while still paying handsomely for its past.

The headline numbers are solid. Underlying EBITDA of $25.4 billion, up 9%. Operating cash flow of $16.8 billion, up 8%. Underlying earnings steady at $10.9 billion. A $6.5 billion ordinary dividend, maintaining the 60% payout ratio for a tenth consecutive year.

Iron ore remains the engine while copper is now firmly in the driver’s seat.

Iron Ore: Reliable, But Feeling the Price

Iron ore EBITDA came in at $15.2 billion, down 11% year on year, reflecting lower realised prices and inflationary pressures. The Pilbara machine continues to hum, with record mining rates post-cyclones and replacement mines progressing on schedule.

Simandou shipped its first ore in December, a significant milestone for the asset. It is early days, but the long runway for high-grade African supply is now visible.

For the broader market, this reinforces a consistent theme. Volume resilience and cost discipline continue to underpin the majors, even in a softer pricing environment. Iron ore remains critical to global infrastructure, urbanisation and industrial activity, and high-quality, low-cost producers retain structural advantages across the cycle.

Copper: The Standout

If there is one line investors should circle, it is this. Copper underlying EBITDA doubled to $7.4 billion, up 114% year on year. Production rose 11%, driven by a 61% uplift at Oyu Tolgoi as the underground ramps up. Unit costs fell sharply. Free cash flow surged.

This is the clearest signal from the result. Diversification is no longer a slide in the deck. It is translating into earnings.

For the wider mining industry, the message is constructive. Scale and quality copper exposure are being rewarded. As electrification, grid expansion and energy transition themes accelerate, capital will continue to gravitate toward long-life, low-cost copper assets with visible production growth.

Copper is increasingly shaping portfolio positioning across the sector.

Aluminium and Lithium: Leaning Into Transition Metals

Aluminium and Lithium delivered EBITDA of $4.6 billion, up 29%. Bauxite hit a record 62.4 Mt. Aluminium pricing and premiums supported the result despite tariff headwinds.

The Arcadium acquisition is now in the numbers. Lithium remains investment-heavy, with growth capital flowing into Argentina and Canada.

This is instructive for investors. The majors are prepared to carry short-term capital intensity in exchange for medium-term optionality in battery minerals.

The ABSI View

Three themes emerge for mining investors.

First, operational excellence has moved front and centre. Productivity gains, disciplined cost management and consistent project execution are carrying greater weight as pricing normalises across key commodities.

Second, copper continues to set the tone. The sector’s earnings mix is evolving, and businesses with visible, scalable copper growth are increasingly commanding stronger investor attention and valuation support.

Third, capital allocation discipline remains critical. Major acquisitions and multi-billion-dollar developments are progressing while shareholder returns are being maintained. How effectively companies balance reinvestment with distributions will shape sentiment through the next phase of the cycle.

Rio’s 2025 result reflects a portfolio being repositioned for the years ahead, with copper growth building momentum, iron ore providing stability, and exposure expanding across future-facing commodities.

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