Rio Tinto Shares (RIO) Dip as Activist Urges ASX Primary Listing

Rio Tinto's share price (LON:RIO) has fallen below the 5,000 level, down 0.97% on what has been an eventful morning for the firm.

An activist investor, Palliser Capital, has called for the mining giant to relocate its primary listing from the London Stock Exchange to Australia's ASX (ASX: RIO).

This proposal aligns with a similar strategic move made by competitor BHP (ASX: BHP), which shifted its main listing to Sydney in 2022.

Palliser Capital holds a significant stake in Rio Tinto, valued at approximately $250 million (£197 million). They argue that moving the primary listing would align Rio Tinto's operations more closely with its business interests and potentially enhance shareholder value. Under the proposed plan, Rio Tinto shares would still trade in London, but as a secondary listing.

The backing for Palliser's proposal includes Australian investment firm Blackwattle Investment Partners, reflecting broader support for the move within significant sections of the investment community. This push to relocate the main listing comes amid rising pressures on the London markets, with several prominent companies like Tui and Flutter choosing to move their primary listings overseas.

Rio Tinto's management, led by Chief Executive Jakob Stausholm, has highlighted the company’s plans for future growth. Stausholm stated that Rio Tinto has “a clear plan for a decade of profitable growth” and is focused on leading in the energy transition materials market while pursuing growth and decarbonisation initiatives. The company plans to maintain its dividend policies alongside these strategies.

Additionally, Rio Tinto forecasts an improvement in its copper production figures, projecting output of 780,000 to 850,000 tonnes by 2025, compared to 660,000 to 720,000 tonnes this year. This expected increase is due in part to strong performances at its Oyu Tolgoi operation in Mongolia. By 2030, the company aims to achieve a production target of one million tons of copper.

The potential relocation of Rio Tinto's primary listing reflects strategic shifts within global markets, alongside the internal goals of enhancing shareholder value and operational efficiency. The ongoing discussions and considerations will reveal how Rio Tinto might navigate these pressures and opportunities.