RIO Tinto plans to expand its metals trading operations, including buying and selling material from third parties and trading derivatives, Bloomberg reported.
The move is part of CEO Simon Trott’s push to make the world’s second-biggest miner more agile and extract more value from its operations.
Rio has historically focused on marketing its own production and has a far smaller trading business than Glencore, whose extensive trading network was one attraction during unsuccessful takeover talks between the companies over the past two years.
Rio does not plan to replicate standalone commodity trading houses, but wants a significant expansion of its existing commercial business, led by chief commercial officer Bold Baatar, according to Bloomberg.
The company is considering more third-party trading in markets where it sees opportunities to optimise its asset base.
These include alumina, where Rio has surpluses in some regions and shortages in others, and copper in North America, where its Kennecott operations have spare smelting capacity.
Rio could also trade copper cathode and related products such as sulphuric acid.
Trott, who became CEO last year, has set out plans to simplify Rio, sell assets and cut costs while improving returns. The company is also in talks with Vitol over a possible freight and logistics joint venture.
Rio’s commercial team has about 20 traders and could add several more, Bloomberg said.
