Summary of RIO Earnings Call (Q4 2025)

1Key Financial Results and Metrics

Underlying EBITDA: Increased by 9% to $25.4 billion.

Stable Underlying Earnings: Reported at $10.9 billion, with a dividend payout of 60%, equating to $6.5 billion returned to shareholders.

Copper Equivalent Production: Increased by 8%, achieving record production levels for both copper and bauxite.

Unit Costs: Reduced by 5% in copper equivalent terms.

Net Debt: Increased to $14.4 billion due to the Arcadium acquisition, with a modest gearing ratio of 18%.

2Strategic Updates and Business Highlights

Operational Excellence: Achieved a $650 million annualized productivity benefit through improved operational discipline.

Project Developments:

Oyu Tolgoi (OT) ramping up to deliver 500,000 tonnes of copper per year between 2028 and 2036.

First shipment of iron ore from Simandou completed, with a target of 60 million tonnes per annum.

Lithium projects progressing towards a capacity of 200,000 tonnes per annum by 2028.

Portfolio Management: Actively testing the market for RTIT and Borates businesses, with a focus on capital discipline.

3Forward Guidance and Outlook

Production Growth: Expected to achieve a compound annual growth rate (CAGR) of 3% for copper equivalent production through the end of the decade.

Cost Guidance: For iron ore, unit costs are projected between $23.50 to $25 per tonne for 2026.

Volume Growth: Anticipated to be more muted at around 3% across managed operations in 2026, impacted by closures and grade declines.

4Bad News, Challenges, or Points of Concern

Safety Incident: A colleague's death at Simandou highlighted ongoing safety concerns, prompting immediate actions including halting site works and launching an independent investigation.

Market Pressures: Traditional sectors like construction remain weak, and iron ore EBITDA decreased by 11%, although this was offset by gains in copper and aluminum.

Competitive Pressures: Competitors like BHP and Fortescue are targeting lower unit costs, raising concerns about Rio's competitive positioning in the Pilbara region.

5Notable Q&A Insights

Glencore Discussions: Simon Trott emphasized that discussions with Glencore focused on value creation, but ultimately, no agreement was reached due to valuation gaps. The potential for synergies was acknowledged but deemed insufficient to justify a merger.

Geopolitical Risks: Trott discussed the company's cautious approach to entering high-risk regions, emphasizing the need for substantial value to justify such moves.

Iron Ore Strategy: The company is adapting its approach to iron ore sales, particularly with the integration of Simandou, while maintaining ongoing discussions with customers in China.

Cost-Cutting Initiatives: Further cost-cutting opportunities beyond the initial $650 million target were discussed, with a focus on improving productivity across all business segments. This summary encapsulates the key aspects of RIO's Q4 2025 earnings call, highlighting both achievements and challenges faced by the company.