Rio Tinto Ltd (ASX: RIO) shares are climbing higher again in Wednesday lunchtime trade.
At the time of writing, the shares are up around 2% for the day, and are trading at $179.98 each.
Today's increase means the ASX mining stock is now up 21% higher for the year-to-date, and they're 53% higher than 12 months ago.
For context, the S&P/ASX 200 Index (ASX: XJO) is down slightly, by around 0.2% at the time of writing, and around 1% higher than a year ago.
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What is causing the Rio Tinto share price rally?
Copper prices are reaching fresh record highs this week as supply struggles to keep up with rising demand from data centers, renewable energy projects and power grids.
According to Trading Economics data, copper futures have climbed to around US$6.8 per pound, up significantly from around US$4.5 per pound around 12 months ago.
Major copper-producing countries in South America have also faced operational challenges this year, contributing to weaker output and exports. And at the same time fears about potential US tariffs has encouraged traders to ship directly to US warehouses, tightening supply elsewhere in the market.
And the increase is good news for Rio Tinto. The company has diversified away from its heavy reliance on iron ore, becoming a major player in the copper market.
The shift has boosted the company's earnings too. For the first half of FY26, Rio Tinto reported a 28% increase in its underlying EBITDA.
And underlying EBITDA for the company's copper business surged 84% to US$5.7 billion, making up roughly 36% to 39% of total group earnings. Copper, aluminium and lithium now contribute more than half of the miner's underlying EBITDA.
Rio Tinto's underlying fundamentals are clearly very strong. But now the question is, can the shares keep climbing higher, or have they reached fair value?
Are the mining shares a buy, sell or hold now?
After an impressive rally over the past 12 months, it looks like Rio Tinto shares could be trading around fair value.
TradingView data shows that the experts are divided about their outlook for the shares. Out of 15 analysts, six have a buy/strong buy rating and another six have a hold rating on the shares. Another three have a strong sell rating.
But after the latest rally, the average $171.92 target price now implies a potential 4% downside, at the time of writing. Although some still tip an upside of up to 10%, to $198.01 over the next 12 months.
The team at Morgans has a hold rating on the mining shares. The broker notes that iron ore remains the primary earnings driver for Rio Tinto, leaving profits exposed to movements in commodity prices and Chinese demand. It added that, given this balance of quality and cyclical risk, the shares now look to be trading at fair value.
