SP Angel Morning View -Today’s Market View, Wednesday 16th July 2025

Steelmaking raw materials slide as Beijing explores new model of property development

MiFID II exempt information – see disclaimer below

Antofagasta (ANTO LN) – Production guidance intact after an 11% rise in H1 copper production

Caledonia Mining (CMCL LN) – Record Q2 gold output prompts increased 2025 production guidance

Critical Metals plc (CRTM LN) – Refinancing and share capital reorganisation at 2p/s to fund drill campaign for copper at the Molulu mine in the DRC

Empire Metals* (EEE LN) – Bulk metallurgical testwork begins, technical team bolstered

KEFI Gold and Copper* (KEFI LN) – Tulu Kapi Project update

Largo Resources (LGO US) – Production recovers in 2Q25 with a supply agreement signed for a 48MWh VRFB in Texas

Kenmare Resources (KMR LN) – Quarterly shipments hit by weather disruptions, discussions with Government ongoing

Mkango Resources* (MKA LN) – BUY – Exercise of warrants

MP Materials (MP US) – Apple agrees a $500m deal with MP for a supply of recycled RE magnets

Rio Tinto (RIO LN) – 2025 production guidance intact as ramp up at Oyu Tolgoi and record bauxite production highlighted

WIA Gold* (WIA AU) – MRE update boosts open pit ounces at Kokoseb

Steelmaking raw materials slide as Beijing explores new model of property development

• Coking coal, nickel and iron ore sled alongside steel this morning as Xi Jinping announced a new approach to property development.
• Xinhua reports China will ‘steadily advance renovation of urban villages and dilapidated houses.’
• Xi has advocated a more measured approach to development.
• Traders had been positioning for a meeting reminiscient of the 2015 $446bn campaign over the Central Urban Work Conference this week, which catalysed a surge in development.
• Data yesterday showed further weaking in the housing market in China over June, with new-home prices hitting eight month lows.
• Bloomberg reports their Chinese developer index fell 4.3% this morning, having rallied sharply last week.
• Developer contracted sales are expected to fall by 12% this year, having slumped 66% between 2020 and 2024. (BI)
• Focus will be on higher-quality developments, and limiting extremely tall buildings, but also improving infrastructure.

Copper – Freeport works to restart production at their Manyar copper smelter next month in East Java, Indonesia.

• A fire at the $3.7bn smelter last year has delayed the commissioning of the new smelter which is targeting 441kt this year with a target of 585kt by year end.
• The Indonesian government allowed Freeport to export 1.27mt of copper concentrate due to the fire and late commissioning of the smelter..

IGTV – The Future of Mining: Gold, Copper, Rare Earths & M&A:  https://youtu.be/-G59iOq6x2c?si=z4fVkyHNP9isbOTB

Economics

US – Inflation picked up both on headline and core basis in June as higher prices from tariffs were partly offset by disinflation in some discretionary spending items like vehicles and hotels.

• Markets trimmed their expectations for a rate cut in September, although, only slightly.
• Odds of a cut in September is now only just a little over 50%.
• Two rate cuts before year end are still more likely than not.
• 10y yields climbed ~6bp and now trade around 4.48% with the US$ index also picking up.
• S&P closed 0.4% lower while Nasdaq was up 0.2%.
• CPI (%mom, Jun/May/Est): 0.3/0.1/0.3
• CPI (%yoy, Jun/May/Est): 2.7/2.4/2.6
• Core CPI (%mom, Jun/May/Est): 0.2/0.1/0.3
• Core CPI (%yoy, Jun/May/Est): 2.9/2.8/2.9

UK – Inflation comes in hotter than expected across all measures including core and services gauges.

• CPI now is at the highest level since January 2024 and is above BOE estimates.
• Businesses are blaming a pick up in inflation on recent increases in payroll taxes and the minimum wage.
• 10y yields are up this morning trading at 4.66%.
• The pound climbed above 1.34 briefly this morning before giving up gains.
• CPI (%mom, Jun/May/Est): 0.3/0.2/0.1
• CPI (%yoy, Jun/May/Est): 3.6/3.4/3.4
• Core CPI (%yoy, Jun/May/Est): 3.7/3.5/3.5
• Services CPI (%yoy, Jun/May/Est): 4.7/4.7/4.5

Yorkshire – Only in God’s own county do you get floods and a hosepipe ban on the same day

Azerbaijan, Armenia and Turkey may work together to exclude Russia from controlling key trade routes through their territories

• Azerbaijan and Armenia appear to have severed ties with Russia following a series of incidents
• Two Azerbaijani citizens died in custody in Yekaterinburg with others appearing in court bruised and beaten.
• Russia ramped up the rhetoric threatening on state TV, that Baku could be taken in three days, they might have thought that about Ukraine!
• We note, Azerbaijan and Armenia may not wish to see their citizens conscripted into Ukraine
• So far talks between Azerbaijan and Armenia are focused on the Zangezur Corridor, a proposed route linking Azerbaijan to its Nakhchivan exclave via southern Armenia.
• The corridor would also serve to physically connect Azerbaijan with Turkey forming a new trade route connecting China and Central Asia to Europe.
• This route was formerly to be managed by Russia’s FSB but Azerbaijani now wishes to manage the trade route excluding Russia from any involvement.
• Prime Minister Nikol Pashinyan of Armenia recently met with President Erdoğan in Istanbul last month softening normally tense relations indicating a softening of their opposition to the corridor.
• The situation sets the stage between a potential peace treaty between Azerbaijan and Armenia and a potential defence agreement between the nations to protect against Russia to the North and Iran to the South.
• Russia also manages a trade corridor linking it to Iran and India which runs through Azerbaijan which may be used to evade sanctions.
• If Azerbaijan closes this trade route to Moscow then Russia will be cut off from two key allies with significant erosion of its influence in the region.

Currencies

US$1.1618/eur vs 1.1692/eur previous. Yen 148.91/$ vs 147.72/$. SAr 17.956/$ vs 17.800/$. $1.339/gbp vs $1.345/gbp. 0.653/aud vs 0.656/aud. CNY 7.177/$ vs 7.174/$

Dollar Index 98.6 vs 97.99 previous

Precious metals:

Gold US$3,340/oz vs US$3,363/oz previous

Gold ETFs 91.0moz vs 91.0moz previous

Platinum US$1,423/oz vs US$1,381/oz previous

Palladium US$1,242/oz vs US$1,197/oz previous

Silver US$38.3/oz vs US$38.4/oz previous

Rhodium US$5,700/oz vs US$5,700/oz previous

Base metals:

Copper US$9,643/t vs US$9,623/t previous

Aluminium US$2,577/t vs US$2,595/t previous

Nickel US$15,096/t vs US$15,000/t previous

Zinc US$2,694/t vs US$2,708/t previous

Lead US$1,988/t vs US$1,988/t previous

Tin US$33,267/t vs US$33,275/t previous

Energy:

Oil US$68.5/bbl vs US$68.7/bbl previous

• Crude oil prices edged lower after the API estimated an unexpected 19.1mb w/w build (-2.0mb draw exp) to crude, partially offset by draws of 4.5mb to gasoline and 2.4mb to distillate stocks.
• OPEC’s July monthly oil report reiterated oil demand y/y growth forecasts of 1.3mb/d in both 2025 and 2026, with global oil supply growth unchanged at 0.8mb/d in 2025 and 0.7mb/d in 2026, plus 0.1mb/d growth in NGLs.
• European energy prices were stable as France’s nuclear generation fell 3% w/w to 68% of 61.4GW maximum capacity.
• EQT has signed a 665,000mmBtu/d deal with the Homer City Energy Campus to convert Pennsylvania’s largest coal-burning power plant into a power and data infrastructure hub, combining high-performance AI computing with an integrated 4.4GW natural gas generating station that is expected online in 2027.
• The UK Government has committed to extending the Contracts for Difference (CfD) contract length in the Allocation Round 7 (AR7) from 15 to 20 years and has changed the eligibility criteria around planning consent.

Natural Gas €34.8/MWh vs €35.1/MWh previous

Uranium Futures $72.3/lb vs $72.3/lb previous

Bulk:

Iron Ore 62% Fe Spot (cfr Dalian) US$106.6/t vs US$106.6/t

Chinese steel rebar 25mm US$459.2/t vs US$458.3/t

HCC FOB Australia US$178.0/t vs US$177.0/t

Thermal coal swap Australia FOB US$113.8/t vs US$113.0/t

Other:  

Cobalt LME 3m US$33,335/t vs US$33,335/t

NdPr Rare Earth Oxide (China) US$66,209/t vs US$63,263/t

Lithium carbonate 99% (China) US$8,851/t vs US$8,723/t

China Spodumene Li2O 6%min CIF US$700/t vs US$680/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$433/mtu vs US$433/mtu

China Graphite Flake -194 FOB US$410/t vs US$410/t

Europe Vanadium Pentoxide 98% US$5.0/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% US$23.8/kg vs US$24.0/kg

China Ilmenite Concentrate TiO2 US$289/t vs US$289/t

China Rutile Concentrate 95% TiO2 US$1,094/t vs US$1,094/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$362.5/t vs US$362.5/t

Germanium China 99.99% US$2,925.0/kg vs US$2,925.0/kg

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

EV and battery news

Stellantis ends hydrogen fuel cell project and van production

• Carmaker Stellantis has announced it will discontinue its hydrogen fuel cell technology programme and no longer launch a range of hydrogen-powered vehicles this year, as it sees no development of the market in the mid-term.
• The group said the decision was due to the limited availability of hydrogen refuelling infrastructure, high capital requirements and the need for stronger purchase incentives for customers.
• Hydrogen is viewed as alternative to battery powered EVs, and could be a big player in the long-distance haulage industry.

BYD and CATL to partner with BHP to help decarbonise operations

• Chinese battery giants BYD and CATL have partnered with BHP, the Australian mining giant, to accelerate the decarbonisation of its mining operations.
• BYD Group’s subsidiary FinDreams Battery recently signed a memorandum of understanding (MoU) with BHP, “to further advance BHP’s decarbonisation efforts in its mining operations and pave the way for a more sustainable future for the entire resources industry.”
• The companies will explore battery system solutions and fast-charging infrastructure suitable for heavy-duty mining equipment and locomotives.
• BHP will also explore the use of BYD’s commercial vehicles and light-duty vehicles at its mines to reduce dependence on diesel vehicles for mining transportation.
• In another statement, CATL said it had also recently signed an MoU, to collaborate with BHP on mining equipment electrification, fast-charging infrastructure development, energy storage, and battery recycling.
• BHP has a long-term vision of achieving net-zero greenhouse gas emissions from its operations by 2050.

Company News

Antofagasta (ANTO LN) 1,845.5p, Mkt Cap £18bn – Production guidance intact after an 11% rise in H1 copper production

• Antofagasta reports a rise of ~11% rise in H1 copper production to 314,900t (H1 2024 (284,700t)
• Gold output increased by ~36% to 91,200oz (H1 2024 – 66,900oz) with molybdenum production rising by ~42% to 7,400t (H1 2024 – 5,200t).
• Cash costs, prior to credits were US$2.32/lb (H1 2024 – US$2.65/lb). After crediting by-products  equivalent US$1.00/lb, net cash costs fell to US$1.32/lb (H1 2024 – US$1.94/lb).
• The company is maintaining its full year production and cost guidance at 660-700,000t of copper with net cost guidance also intact in the range of US$1.45-1.65/lb.
• Today’s announcement confirms that “Production is expected to increase quarter-on-quarter for the remainder of the year, following maintenance activities completed in H1 2025”.
• Los Pelambres contributed 143,200t of copper production (H1 2024 – 132,500t) at a net cost of US$1.03/lb from the processing of 172,400tpd of ore at an average grade of 0.54% copper (H11 2024 – 186,700tpd at 0.54%) and also produced 25,900oz of gold and 5,700t of molybdenum (H1 2024 – 18,900oz and 4,200t of molybdenum).
• Antofagasta says that Los Pelambres’ increased YoY output reflects “higher copper grades and recoveries” as well as higher gold and molybdenum grades.
• The Centinela mine delivered a total of 116,200t of copper, including 35,800t of cathodes at a net cost of US$1.00/lb (H1 2024 – 93,000t of copper, including 49,400t of cathodes at an average net cash cost of US$2.48/lb).
• Centinela’s improved output results from “an increase in copper in concentrate production, offset by lower cathode production, shifting the balance of copper in concentrate to cathodes to 73% of total production across the Centinela District”.
• Antucoya delivered 39,00t of copper during the six months at a cash cost of US$2.58/lb (H1 2024 -40,300t at US$2.58/lb) with the lower production attributed to “an increase in copper recorded as inventories in the leach pads and lower recoveries, partially offset by an increase in ore throughput rates” during Q2.
• The balance of output came from Zaldivar which achieved 16,000t of copper output (H1 2024 – 18,900t) at a cash cost of US$3.22/lb (H1 2024 – US$2.97/lb). Zaldivar’s performance reflected “lower ore throughput rates, partially offset by higher grades”.
• Commenting on the results, CEO, Ivan Arriagada, said that they included “increased production at our two largest copper mining districts, Los Pelambres and Centinela … [with net costs benefitting from] … gold and molybdenum by-products”.
• He said that Antofagasta’s “pipeline of copper growth and development projects at both Centinela and Los Pelambres continues to advance on time and on budget, with recent market movements in by-product pricing strengthening the investment case for these projects”.

Conclusion: Antofagasta is maintaining its 2025 production and cost guidance after a robust H1 performance.

Caledonia Mining (CMCL LN) 1,560p, Mkt Cap £294m – Record Q2 gold output prompts increased 2025 production guidance

• Following record Q2 production at its Blanket gold mine in Zimbabwe, Caledonia mining has raised its full-year production guidance for 2025 to 75-79,500oz of gold production from the previous 74-78,000oz guidance range.
• Record Q2 output of 21,070oz followed a record Q1 performance of 18,671oz of gold bringing year-to-date output to 39,741oz – “a 5.1 % increase on the 37,823 ounces produced in the first half of 2024”.
• Acknowledging what he described as “the dedication and hard work of our team … [Chief Executive, Mark Learmonth said that the H1 production at the Blanket mine] … has exceeded our expectations”.
• Mr. Learmonth said that the “Blanket Mine continues to provide a solid foundation for growth. As we move forward, we are confident that it will continue to be a cornerstone of our success”.
• In June, Caledonia Mining reported that infill and resource expansion drilling at the Blanket mine had intersected a potential new orebody and had also demonstrated depth continuity of the existing Blanket and Eroica orebodies at “better than expected” grades and widths.
• Results from the drilling are expected to contribute to an updated MRE (Mineral Resource Estimate) which is expected to be released later this year.
• Our analysis of previous MREs and production data shows that the Blanket mine has been successful in replenishing mineral resources with the addition of ~1.2m oz of ‘Measured & Indicated’ resources between its January 2020 and December 2023 MREs more than offsetting ~300koz of production and increasing the total resource inventory from ~900koz to ~1.8moz.

Conclusion: Record production from the Blanket mine in each of the H1 2025 quarters has prompted a rise of ~1-1.5koz in full year production guidance, which is now in the range of 75-79,500oz.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

Critical Metals plc (CRTM LN) 0.4p – Refinancing and share capital reorganisation at 2p/s to fund drill campaign for copper at the Molulu mine in the DRC

• Critical Metals report the refinancing and reorganisation of their capital structure to enable the funding of drilling at the Molulu copper mine in the DRC.
• The subscription of £956,482 at 2p/s adds 47.8m new shares will also be used for general working capital as well as the Molulu drill campaign.
• NIU Invest SE, run by Austrian entrepreneur, Cevdet Caner, is investing. The company has also financed Phoenix Copper.
• The company is also offering 23.6m new shares to retail shareholders.
• NIU invested £1,000,000 in a convertible loan note issued in April with a further £628,913 invested as convertible loan notes including £105,000 as a bridge financing last August, £350,000 in September and a further £173,913 in December.
• NIU will hold 55m shares representing 53.95% of the enlarged share capital. This rises 78.5m shares representing 77.2% of the enlarged share capital if retail investors take up no shares in the current retail offering.
• Molulu copper, cobalt mine (DRC)
  • Management had targeted 10,000t per month of copper oxide ore though this was hampered by seasonal rains and the need for more geo-technical groundwork and drilling. The company will focus on an extensive drilling campaign for the rest of 2025.
  • The team are now more focussed on higher-grade sulphide ores below the oxide zone following the discovery of an 8.3% copper sulphide ore sample.
  • Management previously rehabilitated the road connecting the property to several ore buyers’ processing plants to save substantially in contract trucking costs and enable the use of larger 40-50t tipper trucks.
• Shares: After the retail offer, Critical Metals will have around 102m shares following the transaction.
• the Company is further seeking authority at the General Meeting for the Directors to allot all the 95,024,558 New Ordinary Share (“New Admission Shares”) and 12,100,000 warrants over New Ordinary Shares at 0.0005p per New Ordinary Share.
• Critical Metal’s, CEO, Russell Fryer is a US national and a former hedge fund manager. He is likely to be well placed to advise and potentially receive US financial assistance.

Conclusion:  Critical Metals has been hampered by a lack of finance for the drilling and development of the Molulu copper, cobalt mine in the DRC. Relations between the US and DRC are good and new sources of finance are likely to become available for the mining of copper and other critical minerals within the region.

Empire Metals* (EEE LN) 30p, Mkt Cap £207m – Bulk metallurgical testwork begins, technical team bolstered

• Empire have bolstered their technical team further and will now begin bulk metallurgical testwork to support Pitfield titanium flowsheet development.
• The Company has hired Alan Rubio as study manager, who will lead the Pitfield economic studies.
• Pocholo Aviso is also joining, with previous roles at Tronox and BHP’s Kwinana Nickel refiner. He will lead flowsheet and product optimisation.
• Additionally, Empire has partnered with Strategic Metallurgy, a metallurgical consultancy who will provide technical guidance as the Company transitions form bench-scale to pilot-scale testing.
• Empire is also now progressing to bulk metallurgical testwork.
• This will produce ‘significant quantities of mineral concentrate’ which will be provided to end users and support commercial flowsheet development.
• Bulk feed samples of 0.5-1.5 tonnes from the February AC drilling programme will be fed through ore scrubbing, desliming, gravity spiral testwork.
• Additionally, further flotation testwork is being conducted on fines separated during desliming.
• Concentrate will be tested using hydrometallurgical and product finishing stages to produce a consistent mineral concentrate stream.

Conclusion: The expanded technical team, enhanced by the partnership with Strategic Metallurgy, equips Empire with critical expertise as it undertakes bulk-scale metallurgical testing. These efforts are expected to clarify the project’s economic and technical fundamentals, underpinning future feasibility work and reinforcing Pitfield’s status as a significant titanium play. We look forward to updates from the ongoing testwork as Pitfield advances through key project milestones.

*SP Angel acts as nomad and broker to Empire Metals

KEFI Gold and Copper* (KEFI LN) 0.53p, Mkt Cap £50m – Tulu Kapi Project update

• The Company is launching Phase 1 of the Resettlement Action Plan at the Tulu Kapi Gold Project in Ethiopia.
• The programme will be triggered this month with payment of compensation to be funded from KEFI’s existing cash resources.
• The Company raised £7.0m at 0.55p earlier in May.
• KEFI will reimburse covered payments from the drawdown of the Project funding package once closed.
• The launch date is slightly ahead of project schedule with the team keen to start development works as soon as possible for maiden production in 2H27.
• The Company reports that both initial construction and security camps were completed with a new access road nearly finished.
• Project funding is expected to close end of August.

*SP Angel act as Nomad and Broker to KEFI Gold and Copper

Largo Resources (LGO US) US$1.4, Mkt Cap US$86m – Production recovers in 2Q25 with a supply agreement signed for a 48MWh VRFB in Texas

• 2Q25 V2O5 production amounted to 2.3kt (2Q24: 2.7kt).
• Production was up 74% on the previous quarter helped by improved performance at the minesite, higher processed grades and better recoveries.
• Mine pushback activities and roadway improvements were prioritized to secure access to larger benches on the 190/180 levels, including the development of a new eastern access to the Campbell Pit.
• Initiatives are expected to reduce average haul distances and provide independent access to deeper portions of the mine.
• Metallurgical recoveries averaged ~85% (2Q24: 74%).
• Sales amounted to 1.8kt including 0.1kt of third party material (2Q24: 1.8kt).
• Ilmenite production 8.1kt (2Q24: 8.6kt).
• Ilmenite sales 6.0kt (2Q24: 12.3kt).
• Storion Energy, a 50/50 JV between Largo Clean Energy (LGO subsidiary) and Stryten Energy, signed a strategic supply agreement with TerraFlow Energy Operations to supply it with vanadium electrolyte and battery packs.
• Storion will supply with vanadium electrolyte for TerraFlow’s 48MWh Bellville flow battery project in Texas under the lease agreement and supported by Largo Physical Vanadium (LGO holds 65.7% interest).
• We estimate 48MWh to use 240mtV applying assumed 5mtV/MWh intensities, equivalent to ~440mt V2O5 (~$5m at current $5/lb V2O5).
• The lease is expected to start in early 2027.

Kenmare Resources (KMR LN) 311p, Mkt Cap £278m – Quarterly shipments hit by weather disruptions, discussions with Government ongoing

• Mineral sands producer Kenmare provides a trading update for 1H25.
• Ore excavated fell 12%yoy to 9.1mt over Q2, whilst grade increased 16% to 4.45%.
• Ilmenite production up 3% to 245kt yoy and 20%qoq.
• Zircon production over the quarter up 1% to 13.1kt, whilst rutile production fell 8% to 2.3kt.
• Company shipped 182kt, down 23%yoy and 41%qoq but steady over the half year at 489kt.
• Lower shipments over the period reflect poor weather and transshipment maintenance.
• Net debt reported at $83m, up from $25m at year end, expected to fall in 2H26 on free cash flow increase.
• Cash position at 30^th June of $46.5m.
• Kenmare expects an impairment charge over 1H25 of no less than $125m on ‘lower projected future revenue assumptions associated with an uncertain pricing outlook,’ although strong order book noted for 2H25.
• WCP A upgrade project CAPEX estimated retained at $341m, with 75% of the spend expected to be deployed by year end.
• 2025 production and cost guidance retained.
• MD Tom hickey met with the President to discuss conclusion of the Implementation Agreement, and Kenmare reserves ‘the right to safeguard its contractual entitlements, if an agreement cannot be reached.’
• 1H25 dividend guided at $0.08-12/share.

Conclusion: Although both sides have confirmed the termination of the Consortium’s aspirations to acquire Kenmare Resources it remains to be seen whether the discontinued offer has increased Kenmare’s profile sufficiently to attract interest from others.

Mkango Resources* (MKA LN) 29p, Mkt Cap £98m – Exercise of warrants

BUY

• The Company reports of an exercise of existing warrants.
• 0.6m were exercised at 5p and 5.09m were exercised at 7p.
• Exercise of warrants brings in ~£0.36m in the Company.

*SP Angel acts as nomad and broker to Mkango Resources

MP Materials (MP US) US$58, Mkt Cap $9.5bn – Apple agrees a $500m deal with MP for a supply of recycled RE magnets

• The Company and Apple agreed a $500m commitment to establish a rare earth recycling facility in Mountain Pass, California.
• Additionally, Apple agreed an offtake of rare earth magnets produced at the Independence facility in Fort Worth, Texas, using recycled rare earth feedstock.
• The feedstock will be sourced from end of life magnets from electronics and post industrial scrap.
• The Company has been working with Apple for nearly five years to develop advanced recycling technology.
• Piloting results will be used for development of a commercial scale, dedicated recycling line at Mountain Pass.
• First magnet shipments to Apple are expected to start 2027
• The commitment is part of Apple’s more than $500bn pledge to be spent in the US over the next four years.
• Apple reports that nearly all its magnets used in its devised are produced with 100% recycled REEs.
• The Company closed 20% up on the day.

Conclusion: The Company announced another major deal now with Apple to to expand its magnet manufacturing facilities at Independence further accommodating a production line using recycled REE recovered from scrap.

A positive readthrough for Mkango Resources* currently rolling out its short and long loop recycling technologies for recovering of RE materials from end of life equipment. Commercial scale HPMS facility is being currently ramped up in the UK while first RE products are targeted for production at the US facility in 2027.

The news follows the MP/DoD private/partnership announcement reported last week including NdPr and permanent magnets floor prices, offtakes and major equity investment.

Rio Tinto (RIO LN) – 4,397p, Mkt cap £55bn – 2025 production guidance intact as ramp up at Oyu Tolgoi and record bauxite production highlighted

1. In its Q2 production report, Rio Tinto highlights record production at its Oyu Tolgoi copper mine in Mongolia “as it ramps up to become the world’s fourth largest copper mine before the end of the decade” and record bauxite production.
2. In his swansong as Chief Executive before handing over to the current head of the iron-ore business, Simon Trott, in August, Jakob Stausholm described an “excellent operational performance from our mine operations”.
3. On a copper equivalent basis, “production rose 13% in Q2 YoY, and 6% YoY for the half year” to 228,500t for the quarter and 438,300t for H1.
4. Copper production continues to be dominated by the Escondida mine in Chile which delivered 176,000t of copper in concentrates and a further 28,200t of refined copper from its leach plant.
5. Escondida delivered “slightly lower concentrate production due to a reduction in average grade (0.95% in Q2 vs 1.09% in Q1), while refined metal volume increased”.
6. The scale of Oyu Tolgoi’s ramp- up is reflected in the production of 152,000t of copper in concentrate during the first six months of 2025 compared to 98,600t in the comparable period in 2024.
7. Rio Tinto confirms that the ramp-up of Oyu Tolgoi’s production “remains on track to reach an average of around 500 thousand tonnes of copper per year (100% basis and stated as recoverable metal) from 2028 to 2036”.
8. Kennecott’s H1 output of 82,200t of copper compares with 95,300t in H1 2024 reflecting the “challenging geotechnical conditions impacting the south wall of the mine.”
9. Copper Production guidance for the full year remains unchanged between 780-850,000t with the company expecting to achieve the upper end of the range
10. “Bauxite achieved a second consecutive quarterly production record and is now expected at the higher end of the full year production guidance range” of 57-59mt.
11. Q2 production of 15.64mt of bauxite brings H1 output to 30.61mt (H1 2024 – 58.14mt) with the Weipa operations contributing around 60% (18.65mt) and Gove, where “production increased due to better plant reliability and availability” producing a further 21% (6.44mt)
12. Quarterly iron ore production in WA recovered from the Q1 weather induced disruption to deliver 73.55mt bringing H1 output to 135.96mt (H1 2024 – 138.41mt) and maintaining a full year guidance range of 323-338mt with an expectation that “Pilbara shipments to be at the lower end of guidance, due to four cyclones as announced in Q1”.
13. The company clarifies that “Pilbara iron ore guidance remains subject to the timing of approvals for planned mining areas and heritage clearances … [and cautions that the] … system has limited ability to mitigate further losses from weather if incurred”.
14. Rio Tinto also explains that the first shipment of iron ore from its Simandou development in Guinea has been “accelerated to around November 2025, with 0.5 to 1.0 Mt of shipments expected in 2025”.
15. Commenting on the wider market climate for its commodities, Rio Tinto reports that the “Global economy: improved from the end of the first quarter given US/China tariff de-escalation. However, geopolitical tensions and trade barriers remain near-term economic risks”.

• Rio Tinto says that during H1 2025 it “incurred around $300m of gross costs associated with US tariffs on our primary aluminium exports from Canada … [but clarifies that a] …. substantial part thereof has been compensated by the related increase in the US Midwest duty paid premium, which rapidly adapted to the 25% tariffs level in Q1, but, at the end of Q2, was not fully compensating for the 50% tariff”.
• The Chinese economy showed strong growth during the quarter in both industrial activity and net exports with “Trade diversification … [continuing] … as the decline in exports to the US was more than offset by shipments to other regions”.
• In the US, the economy “held up given resilient household consumption and private fixed investment. The impact of tariffs is still feeding through to inflation and sentiment. The housing market continues to be weak and building activities have been hampered by elevated mortgage rates and reduced labour supply”.

1. The US$1.3bn 25mtpa Western Range iron-ore project in WA was officially opened in June while initial production from the US$1.8bn, 34mtpa Brockman syncline iron-ore project in the Pilbara is expected in 2027.
2. Development of the 55% owned Resolution underground copper project in Arizona remains subject to legal challenges including by indigenous groups led by the ‘Apache Stronghold’ group and Rio Tinto confirms that it “continues to engage several federally recognised Native American Tribes to partner on co-management of cultural heritage and advance the Emory Oak collaborative restoration program”.
3. At the 70% owned Winu copper project in WA (Sumitomo 30%), Rio Tinto is working on a pre-feasibility study for “an initial development of processing capacity of up to 10 Mtpa” with the study expected to be delivered later this year.
4. In Peru, a drilling programme at the 45% owned La Granja copper project (First Quantum Minerals 55%) has been completed as part of continuing feasibility studies.
5. Rio Tinto’s exploration efforts cover “17 countries across eight commodities” with a focus on “copper in Angola, Australia, Chile, Colombia, Peru and Serbia, lithium in Australia, Canada, Chile and Rwanda, and diamonds in Angola”.

Conclusion: Q2 operational results confirm 2025 production guidance across all commodity groups with the ramp-up of Oyu Tolgoi and the continuing record bauxite production given prominence in today’s report.

WIA Gold* (WIA AU) A$0.28, Mkt Cap A$382m – MRE update boosts open pit ounces at Kokoseb

• WIA, who are developing the Kokoseb gold project in Namibia, have updated their MRE.
• Updated Kokoseb MRE:
  • Indicated: 54mt at 1.04g/t Au for 1.81moz
  • Inferred: 35mt at 0.99g/t Au for 1.1moz
  • Total: 89mt at 1g/t Au for 2.93moz.
• The new MRE uses a pit shell price of $2,300/oz Au and recoveries of 92%, 91,464m of RC drilling and 29,554m of diamond drilling.
• Cut off Grade of 0.5g/t Au.
• The previous resource stood at 66mt at 1g/t Au for 2.12moz in the inferred category.
• WIA will use the MRE in the upcoming scoping study due in 3Q25.
• DFS due 2H26, alongside mining licence.
• The MRE extends from surface to 480m depth, with 75% from depths <230m and 90% below 300m.
• WIA sees additional in pit ounce potential from new mineralised splays and sub-parallel zones.
• WIA is also exploring the potential for an underground resource, which will be the priority of ongoing drilling.
• Shallow infill drilling will also continue to boost indicated category estimates. #
• WIA currently has four diamond rigs on site, targeting deep extensions, with one RC rig focused on shallow infill drilling.

*An SP Angel Analyst holds shares in WIA Gold

LSE Group Starmine awards for 2025 / 2024 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls for Q1 2025

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

Analysts

John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

George Krokos – george.krokos@spangel.co.uk – 0203 470 0486

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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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