U.S. Copper Demand and Rio Tinto's Resolution Mine

By Naveen Thukral and Melanie Burton

SINGAPORE (Reuters) – U.S. president-elect Donald Trump's new administration should focus on speeding up the permitting process to ensure there is enough copper for the energy transition, said a Rio Tinto (NYSE:RIO) executive on Thursday, referring to its stalled Arizona mine.

Rio Tinto, alongside partner BHP Group (NYSE:BHP), is developing the Resolution copper mine which could supply more than one quarter of the country's domestic copper needs for the highly conductive metal.

However, developing a mine globally takes years, primarily due to lengthy permitting. Chief Commercial Officer Bold Baatar emphasized this point while speaking at the Financial Times commodity summit in Singapore. Currently, development progress on the mine is stalled in U.S. courts and faces opposition from Native Americans as it would create a massive crater impacting a sacred site for the San Carlos Apache in Arizona.

The new Trump administration can approve the mine or keep its development frozen. Baatar mentioned Rio Tinto's commitment to collaborating with Native American groups in determining the best development approach for the mine.

Looking forward, Baatar sees Argentina as a key focus area for Rio Tinto's growth, particularly with its Rincon lithium project and its recent $6.7 billion acquisition of assets from Arcadium Lithium.

Before considering major mergers, like BHP's $49 billion bid for Anglo American earlier this year, Rio Tinto must first demonstrate its ability to generate value from lithium investments.

In addition, regarding Rio's iron ore business, Baatar noted that demand from China is shifting towards higher grade ore, which is less carbon intensive for steel production. Although residential sector demand for steel is declining, the transition to energy and electric vehicles is helping offset this drop.

"The demand for high-grade ore continues to be strong. New industries such as electric vehicles and energy transition are compensating for the dip in the housing sector," he stated.