Why the Rio Tinto Limited share price just printed a 52-week high

The Rio Tinto Limited (ASX:RIO) share price is still a long way levels above $130 in 2008.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Rio Tinto Limited (ASX: RIO) share price hit as 52-week high of $89.65 this morning on the back of an iron ore price that has surged all week to above US$77 per tonne after another tragic iron ore mining accident in Brazil that has caused the deaths of at least 63 people.

It's possible that iron ore supply out of Brazil may fall as a result of the accident after the Brazilian government moves to impose extra regulation on the industry, sanctions, and potentially criminal prosecutions against Vale S.A. and its executives.

Rio Tinto boasts it operates the world's largest integrated iron ore mines in Western Australia's Pilbara and as such is unlikely to be affected by the accident in Brazil, other than being a potential beneficiary of rising iron ore prices if supply out of Brazil is hit.

Rio Tinto has also been in the news recently via its claims it's building the most technologically advanced iron ore mines in the world in the Pilbara that use self-driving trains and robots for transportation across outback WA.

This has helped the iron ore miner derive world-leading margins as it also reportedly has some of the highest grade iron ore going.

One fly in the ointment for Rio and other Australian miners like BHP Billiton Limited (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) is China's growth slowdown on the back of a trade war with the U.S.

In fact China recently reported its slowest GDP growth since 1990, but it still came in at 6% which is a rate other national economies cannot get close to.

It's also worth noting that while the Rio Tinto share price is at a 52-week high today, it's still a long way below pre-GFC mining super-cycle prices above $130 in 2008. As such investors should be aware that mining stocks tend to be cyclical in nature.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. You can find Tom on Twitter @tommyr345 The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another strong showing from the share market today.

Read more »

Three miners looking at a tablet.
Resources Shares

Own ASX mining shares? Experts say an upswing in commodity prices has begun

HSBC economists Paul Bloxham and Jamie Culling explain why global commodity prices are rising.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Brambles, Lifestyle Communities, Northern Star, and Select Harvests shares are sinking

These shares are having a tough session. But why?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop
Share Market News

Will the Reserve Bank wait for the US Fed to cut interest rates first?

Here's when AMP thinks interest rates will be cut in the US, Australia, New Zealand, Canada and the Eurozone.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Healthco Healthcare, Medadvisor, Ramsay Health Care, and Tamboran shares are rising

These shares are having a strong session. But why?

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Share Gainers

If you invested $6,000 in Mesoblast shares a month ago you'd have $15,636 now!

Mesoblast shares have been on a tear this past month. But why?

Read more »

Gold bars on top of gold coins.
Gold

Is it too late to buy gold as an investment in 2024?

Can we still take advantage of gold at new record highs?

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Mergers & Acquisitions

Wesfarmers shares baulk on fresh acquisition gossip

A healthcare company gone nowhere in a decade might be on Wesfarmers' radar.

Read more »