Exclusive: Rio Tinto weighs sale of titanium business, sources say
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Exclusive: Rio Tinto weighs sale of titanium business, sources say
Future of titanium unit likely to be among first decisions of incoming CEO Trott. Trott’s vision for Rio includes focus on streamlining core businesses. China, the world’s biggest producer and consumer of titanium dioxide, has expanded its production to capture over half the global market over the past decade. China wields significant pricing power, which has knock-on effects for Western miners, including on margins.Rio Tinto declined to comment on the report. The company is scheduled to release its half-year results on July 30. The Minerals division reported an underlying EBITDA of $1.1 billion in 2024, 24% lower than in 2023, the company’s financial report shows.
Summary
Companies Future of titanium unit likely to be among first decisions of incoming CEO Trott
Trott’s vision for Rio includes focus on streamlining core businesses, sources say
Global iron ore operations likely be grouped together, sources say
July 24 (Reuters) – Rio Tinto (RIO.L) , opens new tab is considering a possible sale of its titanium unit due to weak prices and low returns, three sources said, just as incoming CEO Simon Trott will weigh up a restructuring of the world’s second-largest miner when he takes over next month.
Titanium, used to make paints, cosmetics and food colouring, is also a vital ingredient in jet engine parts, missile casings, rocket components, submarines and naval vessels because of its strength, corrosion resistance and lightweight properties.
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China, the world’s biggest producer and consumer of titanium dioxide, has expanded its production to capture over half the global market over the past decade, according to data from the U.S. Geological Survey. China wields significant pricing power , which has knock-on effects for Western miners, including on margins.
Rio Tinto declined to comment.
In the company’s portfolio, titanium falls under the Minerals business, headed by Sinead Kaufman. This division also includes borates, used in cleaning products, as well as the Iron Ore Company of Canada, diamonds, and the Jadar lithium project in Serbia.
The Minerals division reported an underlying EBITDA of $1.1 billion in 2024, 24% lower than in 2023, the company’s financial report shows. Iron and titanium operations in South Africa and Canada accounted for more than half.
Trott, who takes over as the company’s CEO on August 25, has headed the iron ore division since 2021.
There is an acknowledgement at the company that internal costs, such as staffing, are excessive, sources have told Reuters, so cost-cutting is expected.
“There’s going to be a middle management clean out,” said one of the sources, who was not authorised to speak publicly.
Part of Trott’s pitch and vision for Rio includes a focus on streamlining the structure of the company’s core businesses iron ore, copper, lithium and aluminium, the sources said.
Australia and possibly Canada’s iron ore operations, and the upcoming Simandou project in Guinea are likely to be grouped together, as well as the recently acquired U.S. lithium company Arcadium and its other lithium projects and investments, they added.
Rio is scheduled to release its half-year results on July 30.
Reporting by Clara Denina in London, Ernest Scheyder in Houston and Melanie Burton in Melbourne; Editing by Veronica Brown and Jane Merriman
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