RIO – UBS rates the stock as Buy

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Rio Tinto has approved the US$2.6bn capital expenditure to develop the 43mtpa Koodaideri iron ore mine in the Pilbara.

UBS notes Rio Tinto is leading the mining technology revolution at the Pilbara operations by increasing its autonomous fleet and completing the Autohaul, its $940m rail investment.

UBS does not believe Koodaideri is a material catalyst for the stock but, that said, it is critical to the investment case in the medium term as it can enhance the company’s position as the lowest-cost iron ore producer globally.

Buy rating maintained. Target is $90.

Sector: Materials.

Target price is $90.00.Current Price is $73.28. Difference: $16.72 – (brackets indicate current price is over target). If RIO meets the UBS target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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