---
endpoint: analytics
pattern: Materials
status: done
latency_ms: 142374
conversation_id: b142b623-156d-4bbf-9700-b8a42a222044
citations: 9
created: 2026-05-31 18:43:18Z
---

# What is Rio Tinto’s core business franchise and the key components of its operating model?

## Rio Tinto (RIO) — Core Business Franchise and Operating Model

### 1. Core Business Franchise

Rio Tinto is a diversified, global mining and metals major with a portfolio of low-cost, long-life ore bodies and integrated processing assets. Its franchise rests on three pillars:

**(a) Scale + diversification across four (now three) commodity exposures.** Historically the company has been run through **four principal product groups: Iron Ore, Aluminium, Copper, and Minerals**, supported by global functions — Development & Technology and Commercial [1][9]. Coal was divested in 2018 [3]. In **2024**, group consolidated sales revenue was **US$53.7bn** and **Underlying EBITDA was US$23.3bn** (vs $23.9bn in 2023), with the product-group revenue mix breaking out as **Iron Ore 50%, Aluminium 24%, Copper 16%, Minerals 10%** [2][8]. Group net earnings were **$11.6bn** and the company generated **$15.6bn in operating cash flow** [8].

**(b) Tier-one, long-life asset base.** The franchise is anchored by a small number of **material, world-class operations**: the **Pilbara iron ore system** in Western Australia (>10% of group earnings and >10% of group Mineral Reserves), **Escondida** copper (Chile), and **Oyu Tolgoi** copper-gold (Mongolia). These are the three properties Rio designates as material under SEC Reg S-K Item 1304 disclosure tests [1]. Around these sit Kennecott (US copper), Iron Ore Company of Canada (IOC), Rio Tinto Iron & Titanium (Canada), Rio Tinto Borates (US), bauxite mining and aluminium smelting assets (Pacific Aluminium, Bauxite, Alumina, Primary Metal), and the **Simandou** iron ore project in Guinea [1].

**(c) Geographic / customer concentration in Asia, especially China.** **57% of 2024 sales** by destination went to **Greater China**, followed by the US (17%), Japan (7%), Other Asia (7%) and Europe (5%) — a structural exposure to the Asian steel cycle and the global energy-transition build-out [2][8].

**(d) Energy-transition product mix.** Many of Rio's products — copper, aluminium, lithium, borates, titanium feedstock, high-grade iron ore — are levered to decarbonisation. The company describes its portfolio as positioned for "new sources of demand" from the energy transition combined with traditional demand [1]. Concretely, in **March 2025 it closed the US$6.7bn acquisition of Arcadium Lithium**, adding lithium assets in Argentina and Australia, and in May 2025 announced a partnership with Codelco on the Salar de Maricunga lithium resource in Chile [5].

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### 2. Key Components of the Operating Model

#### 2.1 Product-group based segment structure (the historical "4 PG" model through 2024)

| Product Group | Principal Activities |
|---|---|
| **Iron Ore** | Iron ore mining (Pilbara), plus salt and gypsum production in Western Australia [3] |
| **Aluminium** | Bauxite mining; alumina refining; aluminium smelting [3] |
| **Copper** (historically Copper & Diamonds) | Mining and refining of copper, gold, silver, molybdenum and by-products; exploration; Simandou iron ore project reported here [1] |
| **Minerals** (historically Energy & Minerals) | Borates, titanium dioxide feedstock, Iron Ore Company of Canada, Diamonds [1] |

#### 2.2 Management structure — Executive Committee reporting to the CEO

> "Rio Tinto's management structure is based on the principal product groups together with global support functions whose leaders make up the Executive Committee. The Executive Committee members each report directly to the Chief Executive of Rio Tinto who is the chief operating decision maker (CODM) and is responsible for allocating resources and assessing performance of the operating segments." [3]

Key mechanics:

- **PG Chief Executives** run mining/processing assets within each commodity vertical.
- **Global support functions** — Commercial (sales/marketing/logistics), Development & Technology (project delivery, innovation, exploration) — sit horizontally and support all PGs [1][9].
- **Finance costs and net debt are managed Group-wide**, not at the segment level [3], reflecting a centralised treasury and capital-allocation function.
- The CODM (CEO) monitors PGs on **underlying earnings, underlying EBITDA, capex, operating cash flow and free cash flow** [3].

#### 2.3 The August 2025 reorganisation — from 4 segments to 3

Under incoming CEO Simon Trott (succeeded Jakob Stausholm on 25 August 2025), Rio announced **"a new operating model and executive leadership team to simplify"** the company [5]. The product-group structure was recast from 4 to 3 segments [4]:

- **Iron Ore** — now includes Iron Ore Company of Canada (IOC), which was moved out of Minerals
- **Aluminium & Lithium** — combines the legacy Aluminium PG with **Rincon** (lithium) and the newly acquired **Arcadium Lithium** business
- **Copper** — unchanged in scope
- **Rio Tinto Iron & Titanium and Rio Tinto Borates** were placed under **strategic review** in 2025; **Diamonds** is now reported outside the product-group structure, managed by the Chief Commercial Officer [4]

#### 2.4 Operational levers — the Safe Production System

The operating model is reinforced by a group-wide productivity programme: the **Safe Production System (SPS)** — described as "driving efficiency and cost discipline" through FTE optimisation and business transformation [7]. In H1 2025, group operational FTEs decreased ~2% YoY while production grew; Kennecott FTEs declined ~10%; a business transformation programme was launched at Iron & Titanium Quebec [7].

#### 2.5 Capital structure and listing

- **Dual-listed company (DLC)** structure: **Rio Tinto plc** (London Stock Exchange) and **Rio Tinto Limited** (ASX) [1].
- **49,000 employees** globally, operations in **35 countries** (2021 baseline) [1].
- **Capital allocation framework**: disciplined investment in line with guidance, consistent interim dividend payout, strong balance sheet maintained [6]. 2024 dividend per share **402.0 cents** (vs 435.0 cents in 2023) [2].
- In **March 2025**, Rio priced **US$9.0bn of fixed and floating-rate SEC-registered debt** via Rio Tinto Finance (USA) plc, fully guaranteed by both DLC parents [5].

#### 2.6 The "diversified portfolio + capital discipline" thesis

Rio's own framing of its operating model centres on **diversification driving resilience**: in H1 2025, despite a **13% YoY decline in the iron ore price**, the group still generated **US$11.5bn of Underlying EBITDA** (vs $12.1bn in H1 2024) with copper +$0.8bn and aluminium +$0.2bn offsetting iron ore -$2.0bn from price [6][7]. Management characterises the franchise as built on a **"strong portfolio of assets across six continents"** focused on growing the business while decarbonising, supplying transition materials, and "delivering attractive returns to our shareholders" [1].

---

### Summary Table — Operating Model Building Blocks

| Component | Description |
|---|---|
| **Asset portfolio** | Tier-one Pilbara iron ore + Escondida/Oyu Tolgoi/Kennecott copper + global bauxite/alumina/aluminium + lithium (Arcadium) + IOC, RTIT, Borates [1] |
| **Segment structure (pre-Aug 2025)** | 4 PGs: Iron Ore, Aluminium, Copper, Minerals [1][3] |
| **Segment structure (post-Aug 2025)** | 3 PGs: Iron Ore, Aluminium & Lithium, Copper [4] |
| **Management** | PG CEOs + global function heads on Executive Committee, reporting to Group CEO (CODM) [3] |
| **Support functions** | Commercial; Development & Technology [1] |
| **Productivity programme** | Safe Production System (SPS) — FTE optimisation, business transformation at IT Quebec, Kennecott [7] |
| **Capital allocation** | Group-wide debt/treasury; disciplined investment in line with guidance; consistent interim dividend [3][6] |
| **Listing** | Dual-listed plc (LSE) + Ltd (ASX) [1] |
| **Customer mix** | 57% Greater China by destination in 2024 [2] |
| **Revenue mix 2024** | Iron Ore 50% / Aluminium 24% / Copper 16% / Minerals 10% [2] |
| **2024 scale** | Sales US$53.7bn; Underlying EBITDA US$23.3bn; net earnings US$11.6bn; CFO US$15.6bn [2][8] |

---

**Sources**

[1] 2022 6-K Rio Tinto Group — Deloitte independent expert profile of Rio Tinto's iron ore operations (RIO)
[2] Annual Report 2024 — Rio Tinto, "At a glance" — sales by destination and product group, EBITDA by PG (RIO)
[3] Rio Tinto Annual Report 2020 — Note 2 Operating Segments, management structure (RIO)
[4] 2025 6-K Rio Tinto Group — Financial information by business unit; 27 August 2025 reorganisation from 4 to 3 segments (RIO)
[5] 2025 6-K Rio Tinto Group — Additional statutory disclosure; Arcadium close, Codelco partnership, leadership transition, new operating model announcement (RIO)
[6] 2025 H1 Results Slides — Diversified model and resilience (RIO)
[7] 2025 H1 Results Slides — Safe Production System, operational levers, FTE reductions (RIO)
[8] Annual Report 2024 — Group KPIs: Underlying EBITDA $23.3bn, net earnings $11.6bn, CFO $15.6bn, DPS 402.0c (RIO)
[9] Rio Tinto 2017 Annual Report — Group overview; assets managed through four product groups, supported by Growth & Innovation and Commercial (RIO)

## Citations

- [1] **2022 6-K Rio Tinto Group** · external
- [2] **Annual Report 2024** · external
- [3] **Rio Tinto Annual Report 2020** · external
- [4] **2025 6-K Rio Tinto Group** · external
- [5] **2025 6-K Rio Tinto Group** · external
- [6] **2025-hy-results-slides.pdf** · external
- [7] **2025-hy-results-slides.pdf** · external
- [8] **Annual Report 2024** · external
- [9] **Rio Tinto 2017 Annual Report** · external

