How this 'game-changing' technology could boost Rio Tinto shares

Rio Tinto is embracing space age technology to increase its growth prospects.

| More on:
Female South32 miner smiling with mining machinery in the background.

Image source: Getty Images

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

Rio Tinto Ltd (ASX: RIO) shares have been strong performers over the past 12 months.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant have gained 9.60% since this time last year, closing yesterday trading for $132.55. And that's not including the $6.54 per share in fully franked dividends Rio Tinto has delivered over the past year.

For some context, the ASX 200 is up 5.31% in 12 months.

The miner has come under some pressure in 2024 amid slumping iron ore prices as steel demand in China remains subdued amid the nation's struggling property markets.

Fortunately, Rio Tinto shares also garner significant revenue from aluminium and copper. Both metals have enjoyed increased demand and rising prices this year.

Demand growth for copper has outpaced supply growth as the red metal is crucial in the world's decarbonisation efforts. Copper also has been getting an unexpected boost from the rapid rise of AI. That's because the AI revolution will require massive new data centres, involving plenty of copper.

All up the copper price has gained almost 11% year to date, currently trading for US$9,458 per tonne.

Rio Tinto shares have already enjoyed some tailwinds from the red metal as the miner said it is working to ramp up copper production at its Oyu Tolgoi mine in Mongolia.

In its full-year results, the ASX 200 miner announced:

Our Copper C1 unit costs are expected to decrease in 2024, primarily driven by higher volumes at Oyu Tolgoi as the underground continues to ramp up and at Kennecott, where refined copper volumes are expected to increase following the planned smelter rebuild in 2023.

With some 13% of Rio Tinto's revenue expected to come from copper this year, and potentially more in the years ahead, we turn to the "game-changing" technology Rio Tinto is employing to advance its exploration activities.

Rio Tinto shares go high-tech

The ASX 200 miner isn't planning any drill holes on Mars.

At least, not yet.

But as The Australian Financial Review reports, Rio Tinto shares could get a boost from the same technology NASA scientists used to analyse rocks on our neighbouring planet.

Namely, laser-induced breakdown spectroscopy, or LIBS.

According to the miner, LIBS could drastically improve exploration efficiency and slash the time needed to uncover new copper and lithium deposits.

Rather than geologists combing through data from drill core samples, with an average of 75 days to get the assays from those samples back, Rio Tinto said LIBS can reveal the mineralogy and chemistry in just 60 minutes.

Rio Tinto's head of exploration Dave Andrews said, "That is a major game changer for exploration and that's something that we're deploying around the world now."

According to Rio Tinto:

LIBS can detect even the lightest elements on the periodic table, including lithium, an element key in our energy transition. It also allows us to more accurately estimate the carbon capture potential of a rock, unlocking even greater possibilities in our projects.

With the help of LIBS, Rio Tinto shares could well gain further exposure to copper. The ASX 200 miner is expected to spend around $200 million on copper exploration this year.

Rio Tinto releases its quarterly update this Wednesday.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

ASX 200 mining stocks flying higher on 'most relaxed' Chinese stimulus ever

BHP, Fortescue and Rio Tinto shares could all benefit from China’s new stimulus measures.

Read more »

A man closesly watch a clock, indicating a delay or timing issue on an ASX share price movement
Mergers & Acquisitions

BHP shares charging higher as the clock ticks down on the Anglo American takeover

BHP has less than three days before the clock runs down on its $64 billion Anglo American takeover bid.

Read more »

Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie
Resources Shares

2 of the best ASX mining stocks to buy now

Analysts have good things to say about these miners.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
Dividend Investing

Buy 300 shares in this glorious ASX 200 dividend stock and create almost $2,000 in passive income

Atop the juicy passive income, I like this ASX dividend beauty for its potential share price gains.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Resources Shares

Up 51% from their 52-week low, is it too late to buy Mineral Resources shares?

Mineral Resources has been on a tear since mid-January. Do these top brokers think it's too late to buy?

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

ASX 200 mining shares charging higher amid China's $210 billion cash injection

The big three ASX 200 miners are charging higher on Friday even as the benchmark sinks.

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Resources Shares

What this unprecedented short squeeze signals for ASX copper stocks

ASX copper stocks have been benefiting from soaring demand for the red metal amid limited new supplies.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

What's the outlook for ASX iron ore shares after the federal budget?

There may be trouble ahead for the iron ore price according to broker Citi.

Read more »