The Rio Tinto Limited (ASX: RIO) share price went through quite a lot of volatility in June. But can it turn things around in July?
This ASX mining share is one of the biggest resource businesses in Australia with large iron ore mining operations. It also has exposure to a number of other commodities including bauxite, aluminium, copper and titanium dioxide.
Interestingly, the Rio Tinto share price is now back to where it was at the start of 2022.
The ASX resource share has been making moves to position itself for future growth. This is what brokers are focused on now, and what could influence the company in July and beyond.
Gudai-Darri mine
A few weeks ago, Rio Tinto noted that it had delivered its first ore from the Gudai-Darri iron ore mine. This was the miner's first 'greenfield' mine in the Pilbara, Western Australia, in more than a decade.
Rio Tinto says that Gudai-Darri will help underpin future production of its Pilbara product. Production from the mine will continue to ramp up through the rest of the year and is expected to reach full capacity during 2023.
This mine has an expected life of more than 40 years and an annual capacity of 43 million tonnes. A feasibility study to support an expansion of the new hub is also progressing.
Rio Tinto says that Gudai-Darri is the company's most technologically advanced iron ore mine, with autonomous trucks, trains and drills, as well as the world's first autonomous water trucks. It also has a 34MW [megawatt] solar farm that is expected to supply about a third of the mine's average electricity demand once construction is complete in August.
Broker thoughts on the Rio Tinto share price
No one can know what a share price will do in any given year, or even a month. But, brokers do release price targets which indicate where they think a company's share price may be in 12 months.
Macquarie recently reduced its target for Rio Tinto shares to $124, but it still has an outperform/buy rating. That implies a rise of more than 20% based on the iron ore price and a lower Australian dollar.
Morgan Stanley has an overweight/buy rating on the Rio Tinto share price. The price target is $119.50, which implies a possible rise of around 20%. The broker likes this ASX mining share because of its high-quality iron ore product and the aluminium in the portfolio.
Both brokers are expecting big dividends from Rio Tinto.
Macquarie predicts a grossed-up dividend yield of 16.1%, while Morgan Stanley's projected grossed-up dividend yield is 16.2%. So, both of them are expecting big dividend income in the current financial year.
Rio Tinto share price snapshot
Rio Tinto shares have fallen 13.5% over the last month and 20% in the last 12 months.
