The giants of the mining industry roam the world for commercially ore bodies and one of the largest mining companies is Rio Tinto. The global mining company with head offices in London, UK and Melbourne, Australia mines iron ore, copper, aluminum and specialty minerals.
In an article from Reuters, Rio Tinto is spending $2.4 billion to build and mine a lithium processing plant in Serbia. The reason for Serbia is the Rio Tinto has found an economically way to extract lithium from jadarite, a mineral that is found in one Serbian valley.
The first production is for 2026 and Sinead Kaufman, Chief Executive of Rio’s mineral division said the mine will be the largest in Europe for at least 10 years. The European companies of BMW, Volkswagen, Tesla have not given committed orders but they are showing lots of interest.
Rio plans a material increase in research and development beyond the $240 million it spends a year. Jared Osborne, general manager of the R&D facility said. The company is presently working to make aluminum carbon free and processes to produce green steel.
Linking to dividend paying stocks, companies which make a profit can have a longer time frame to understand and react to the market. In this example Rio Tinto is using its skills in mining, has an active R&D department and needs to try to have a 5 year outlook abut mining to produce an expected mineral in demand in the future. Part of the reason you want to own profitable companies is the expected long term horizon they should have and are investing in to ensure the company is profitable in the years to come.
There are more questions than answers, till the next time – to raising questions.