Rio Tinto Invests $87M to Up Low-Carbon Aluminium Production in Canada
Metals and mining major Rio Tinto Group (RIO) recently announced that it has made an investment of $87 million to increase low-carbon aluminium production in Canada.
Following the news, shares of the company rose marginally to close at $60.79 in Wednesday’s extended trading session.
Details of the Investment
The $87 million investment involves 16 new smelting cells at its AP60 smelter in the Saguenay-Lac-Saint-Jean region of Quebec. The investment is expected to increase production at the smelter by around 45% to a capacity of 86,500 metric tonnes of primary aluminium per year.
Notably, work on the project will begin in the spring of 2022 and is expected to be completed by the end of 2023.
The Chief Executive of Rio Tinto Aluminium, Ivan Vella, said, “Rio Tinto is committed to strengthening its position as a leader in low-carbon, hydro-powered aluminium production to meet the clear demand from our customers in North America and Europe. Our AP60 technology is one of the most energy efficient, environmentally friendly and cost effective systems in commercial production today. It produces some of the world’s lowest carbon aluminium with renewable hydropower here in Quebec.”
See Top Smart Score Stocks on TipRanks >>
On October 20, Jefferies analyst Chris LaFemina downgraded the stock from Buy to Hold. The analyst’s price target of $71 implies upside potential of 17% from current levels.
The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average Rio Tinto price target of $77.18 implies that the stock has upside potential of 27.2% from current levels.
Rio Tinto scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform market expectations. Shares have declined 3.8% over the past year.
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