RIO - ANALYSIS AT 20 JUNE 2025

1. 📊 Peer Comparison: RIO vs BHP & Vale

Metric / Company	RIO Tinto (RIO.L)	BHP Group (BHP.L)	Vale SA (VALE)
Market Cap	~£110 bn	~£110 bn	~£35 bn
5-Year Stock Return	+38 % over five years; ~57 % over ten years	—	—
Dividend Yield	~6.4 % (5-year avg)	~6.35 %	~7.6 %
P/E Ratio	~11.5× current; ~10× average	~12.1× current; ~13.3× FY23	—
Volatility Relative to RIO	Highly correlated (~0.9 over 3 months)	—	~1.39× more volatile
Cash Flow & Debt	Strong cash flow and lower net debt	More debt but higher revenue	—

Key Takeaways:

• RIO is competitively valued: Similar yield and P/E to BHP, with lower volatility than Vale.
• Over the past decade, RIO has outperformed BHP, especially in total return.
• Vale, while cheaper with a higher yield, carries greater volatility.

2. 📈 Historical Performance Under Macro Shifts

• Similarity with peers: RIO’s stock trends closely mirror BHP and Vale, with a correlation of ~0.9.
• Best performance periods:
  • 2016–2021: Commodity supercycle rebound drove RIO ~+90%.
  • During inflationary spikes: Mining equities tend to benefit, especially when rates are low and growth is steady.

Visual Summary (imagine this charted):

• X-axis: 2014–2025
• Y-axis: Indexed (100 = 2014 start)
• Plots: RIO, BHP, Vale
• Vertical bars marking:
• 2020–21 QE-inflation rebound (all three up 50–90%)
• 2024 industrial slowdown (drop of 10–20%)

3. 🔍 What to Watch (Macro vs Company)

• Commodity Prices: Iron ore, copper, aluminium — positive moves support RIO.
• Chinese industrial signals: Slowdowns weaken miners.
• Global M&A & consolidation: Activity may lift market sentiment.
• Structural moves: United-listing debate (ASX/LSE) may impact investor demand.

✅ Bottom line

• RIO is competitive: Similar valuation to BHP, less volatile than Vale, with consistently strong dividend income and historical outperformance.
• Shares highly correlated with peers: It moves in sync with industry-wide shifts.
• Macro factors matter most: Commodity prices and Chinese demand are the main drivers.
• Outlook: If the Fed cuts rates and inflation remains modest, RIO is well placed to rebound; but a significant global slowdown would hit miners across the board.