The Rio Tinto Ltd (ASX: RIO) share price hit a 52-week low last week, reaching $102 on Friday morning. Given the uncertain geopolitical environment, it's not surprising that the ASX mining share has declined.
The above chart shows how the business is at a low point.
When it comes to commodity businesses, the price of that resource can make a big difference.
According to Trading Economics, the iron ore price has fallen to below US$95 per tonne. That reduction reduces Rio Tinto's monthly profitability because its costs don't fall in line (if at all) with the revenue.
But, it's hard to estimate what the iron ore price will do because it's dependent on Chinese demand, which can be unpredictable.
Let's consider whether the ASX mining share is an appealing buy.
Is it time to dig in with Rio Tinto shares?
UBS released a note on Friday, which showed the broker has a neutral rating on the business. However, the price target is $120, which implies the broker is predicting the Rio Tinto share price could climb by 17.5% over the next year.
UBS' note focused on the huge iron project in Africa called Simandou.
The broker pointed out that Rio Tinto expects first production from Simandou in 2025, with a ramp-up to 60mt per annum over the subsequent 30 months (with Rio Tinto's share of that being 27mt).
UBS also noted that Rio Tinto recently confirmed the Simfer mine on is on track, the non-managed infrastructure is progressing well and is on track, and the workforce across the Simfer scope has increased to 18,900 (up from 13,300 in January 2025).
In May 2025, Rio Tinto's head of the Simandou project confirmed he expects the first shipment in November 2025.
The ASX mining share noted that from satellite images, UBS noted that bridge and railway construction has ramped up quickly over the last three months. It estimates 104 bridges have been fully constructed, up from 56 in the first quarter, with a further 28 under construction.
For Morebaya Port, the four-berth barging wharf and the two-berth general purpose wharf appear largely complete, and the car dumper on the rail loop.
Overall, progress to date appears promising. When Rio Tinto's African operations are fully complete, it could unlock a significant boost for the company's earnings.
Forecasts for the ASX mining share
In FY25, which is the 2025 calendar year, UBS is projecting that Rio Tinto could generate US$51.1 billion, US$10.25 billion of net earnings. It could also deliver US$6.28 of earnings per share (EPS) and pay a dividend per share of US$4.38.
At the current Rio Tinto share price, it's valued at 10.5x FY25's estimated earnings, with a possible grossed-up dividend yield of 9.4%, including franking credits.
Overall, I think this is a very good time to buy Rio Tinto shares at this lower price, with its exposure to copper and African iron ore, as well as the large projected dividend yield.
