FTSE 100 mining group Rio Tinto (RIO) has endured decidedly mixed fortunes year to date.

First, the Anglo-Australian business saw its $2.4 billion lithium project in Serbia cancelled by the country’s authorities. The move has prompted some to wonder if it was a form of retaliation for Serbian tennis star Novak Djokovic’s deportation from Australia.

At face value the decision was instead made following pressure from environmental campaigners. Rio Tinto has few avenues to try and revive the development, which would have been Europe’s largest lithium mine.

Taking legal action against the Serbian government would likely create more problems than it solves. Rio is largely keeping its counsel for now and may wait for the result of elections in April and hope for a fresh hearing then.

This setback follows on from the miner’s destruction of ancient Aboriginal rock shelters as part of works on an iron ore project in Western Australia in 2020, a scandal which led to the exit of the company’s then-senior management team.

However, there was positive news on 25 January with the Oyu Tolgoi project in Mongolia, set to be the fourth biggest copper mine in the world by 2030.

After considerable disruption, underground expansion of the mine looks set to go ahead after project co-owner Turquoise Hill – which is 51% controlled by Rio Tinto – agreed to write off $2.4 billion worth of debt owed by the Mongolian government on its share of development costs.

However, Rio Tinto’s struggles in Serbia may add to pressure to accelerate a strategic reset at the company – where chief executive Jakob Stausholm is already attempting to reposition the business to align with global decarbonisation efforts.

There may even be a clamour to follow in the footsteps of Rio Tinto’s peer BHP (BHP) and abandon its dual listing in London and Sydney.

BHP will exit the FTSE 100 before the end of the month after shareholders approved plans to ditch its dual UK and Australian structure and move its primary listing down under.

Among the rationale for the decision was that it would make it easier for the group to use its shares in the pursuit of acquisitions. Speculation is mounting that BHP might be lining up a blockbuster takeover of Glencore (GLEN), having apparently regained its appetite for substantial M&A.

Any such move might have to wait until BHP has completed the merger of its oil and gas assets with Woodside Petroleum, targeted for the second quarter of 2022.

Meanwhile, Australian iron ore firm Fortescue Metal has bought the Williams F1 battery and technology team, signalling the growing intent in the industry to cover all angles of the energy transition.

‹ Previous2022-01-27Next ›