Rio told to start buying copper mines rather than build them

Rio Tinto still owns a stake in the abandoned Bougainville copper mine

Rio Tinto Group should focus on buying floundering rivals to secure copper mines instead of building new ones, according to Sanford C. Bernstein Ltd.

“The decision should be a no-brainer,” Paul Gait, an analyst at Bernstein in London, said in a note Friday. “Building a new ton of supply costs significantly more than buying an existing one.”

Rio said Thursday it plans to cut its dividend by as much as half to strengthen its finances, leading to speculation that the world’s second-biggest miner is readying to grab assets from other companies weighed down by debt. The London-based company reined in acquisitions in recent years as smaller rivals held on to the most profitable mines.

It has a list of assets it’s keen to buy should they come up for sale, Chief Financial Officer Chris Lynch said.

Read more at Bloomberg Business

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