Rio Tinto share price rises amid rare earths acquisition

Rio Tinto has just expanded its green commodity exposure.

| More on:
A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Key points

  • Rio Tinto is buying into a scandium project for $14 million
  • Scandium is a commodity used for a variety of green energy applications
  • Rio Tinto thinks there are synergies with its aluminium business

The Rio Tinto Ltd (ASX: RIO) share price has gone up slightly after the ASX mining share revealed an appealing acquisition in the scandium space.

In the last few years, Rio Tinto has been looking to grow its exposure to materials that are essential for the low-carbon transition. Copper and lithium have taken the headlines, but now it's expanding with a different commodity.

At the time of writing, the Rio Tinto share price is trading at $112.18,

Rio Tinto acquires Platina scandium project

The ASX mining share has spent $14 million to buy the Platina scandium project, based in New South Wales, from Platina Resources Limited (ASX: PGM).

The project is located near Condobolin in central New South Wales, which is a "long life, high-grade scalable resource that could produce up to 40 tonnes per annum of scandium oxide, for an estimated period of 30 years."

This isn't a complete new commodity for Rio Tinto – it currently produces scandium oxide from titanium dioxide production waste streams at Sorel-Tracy in Quebec. But, once the Platina project is operational, it would enable the business to more than double its annual scandium production.

What's so good about scandium?

Rio Tinto explained that scandium is a "rare, versatile and use mineral" which is important for the 'green' economy and the energy transition. Countries like the US, Canada and Australia believe it's a critical mineral.

Scandium is very effective at strengthening aluminium, while also improving "flexibility and resistance to heat and corrosion." It is used in applications like aerospace, automotive, heat exchangers, sporting goods, 3D printing and energy transmission applications.

The mineral can also be used to improve the performance of solid oxide fuel cells which are used as a "green power source for buildings, medical facilities and data processing centres, as well as in niche products such as lasers and lighting."

Rio Tinto pointed out that with its aluminium businesses, it's "well-positioned to produce more high-performance aluminium-scandium alloys to meet global customers' needs."

Executive comments

Rio Tinto's minerals CEO Sinead Kaufman said:

This acquisition supports our commitment to critical minerals and finding better ways to provide materials the world needs.

It will enable us to further develop and grow with the global scandium market, complementing our existing scandium production in Quebec, where we have the expertise, technology and capacity to produce pure, highly reliable scandium through sustainable methods.

Foolish takeaway

While this is an exciting development for Rio Tinto, it may not be surprising that the Rio Tinto share price hasn't moved much considering it's a $14 million acquisition by an ASX mining share worth many billions of dollars.

Created with Highcharts 11.4.3Rio Tinto Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Two mining workers in orange high vis vests walk and talk at a mining site.
Resources Shares

ASX All Ords mining stock sinks on US silver acquisitions

Investors are bidding down the ASX All Ords miner on US acquisition news. But why?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

How these 2 tailwinds could boost the BHP share price into 2026

A leading expert forecasts that BHP shares are set to recover. But why?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Resources Shares

3 reasons why the BHP share price could still be a buy

There are a few reasons why this mining giant could be appealing.

Read more »

Miner standing in front of trucks and smiling, symbolising a rising share price.
Resources Shares

The pros and cons of buying Fortescue shares in June

Let’s dig into whether it’s a good time to invest in this mining giant.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »