Rio Tinto Group (NYSE:RIO) H2 2025 Earnings call February 19, 2026 03:30 AM ET Company ParticipantsBen Davis - Head of European Metals and Mining ResearchEphrem Ravi - Managing DirectorGlyn Lawcock - Head of Resources ResearchLiam Fitzpatrick - Managing Director and Head of European Metals and MiningMatthew Greene - VPPaul Young - Managing DirectorPeter Cunningham - CFORahul Anand - Executive Director and Head of Australia Materials ResearchSimon Trott - CEONone - Company RepresentativeConference Call Parti ...

Financial Data and Key Metrics Changes - Underlying EBITDA increased by 9% to $25.4 billion, driven by strong operational performance and productivity improvements [6][12] - Stable underlying earnings of $10.9 billion, with a dividend payout of 60%, equating to $6.5 billion returned to shareholders [6][13] - Net debt rose to $14.4 billion, with a modest gearing of 18% [13][23] Business Line Data and Key Metrics Changes - Copper equivalent production increased by 8%, setting annual records for both copper and bauxite [5][6] - Copper EBITDA more than doubled to $7.4 billion, with shipments up 60% at Oyu Tolgoi [20][21] - Iron ore delivered $15.2 billion of EBITDA, with unit costs in line with guidance at $23.50 per ton [20][21] Market Data and Key Metrics Changes - Copper and aluminum prices rose by 9%, with copper ending the year 44% higher than the previous year [14] - Iron ore remains supported by Chinese steel export growth, with a structurally balanced market [13][14] - Lithium markets showed strong momentum, with battery storage demand emerging as a fast-growing pillar of the energy transition [14][15] Company Strategy and Development Direction - The company aims for a 3% CAGR for copper equivalent production through to the end of the decade, focusing on operational excellence and cost reductions [7][10] - A significant portion of the exploration budget (85%) is directed towards copper, emphasizing the importance of value-accretive projects [9] - The company is committed to capital discipline, with rigorous capital allocation guiding every investment decision [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for improved safety measures following a recent tragedy at the Simandou site, emphasizing the importance of safe operations [3][4] - The company is confident in achieving its production targets, including the 60 million tons per annum of iron ore from Simandou [9][58] - Future growth is expected to be driven by strong demand for aluminum, lithium, and copper, despite some supply constraints [7][14] Other Important Information - The company is actively testing the market for RTIT and the Borates businesses, aiming to deliver $5 billion-$10 billion in cash proceeds from its asset base [10] - The company has a strong balance sheet and is generating stable operating cash flow from its diversified portfolio [24] Q&A Session Summary Question: Insights on Glencore discussions and coal ownership - Management assessed the transaction with a focus on underlying asset quality and potential value creation, concluding that an agreement could not be reached [30][39] Question: Opportunities in streaming agreements - Management indicated that various options exist across the portfolio for capital release, including potential streaming agreements [32][33] Question: Cost-cutting opportunities in Pilbara - Management confirmed that the $650 million run rate for productivity improvements is expected to be exceeded in 2026, with a multi-year program in place [34][35] Question: Iron ore cost targets compared to competitors - Management emphasized the importance of comparing full unit costs and highlighted ongoing efforts to drive efficiencies in the Pilbara [67][69] Question: Future of iron ore negotiations - Management confirmed ongoing conversations with customers, focusing on securing supply and creating value together [74][75] Question: Geopolitical risk considerations - Management acknowledged the complexities of operating in high-risk regions and emphasized the importance of value and risk mitigation in decision-making [92][96]

The Democratic Republic of Congo struck a deal to tender copper from a major Glencore operation in the country, expanding the state miner’s trading of a metal that’s key to the energy transition https://t.co/n6sVP7VY2b ...

Core Viewpoint - The initial investments from a $550 billion agreement between the US and Japan are criticized for contributing to pollution, particularly through fossil fuel projects [1][2]. Investment Details - SoftBank Group Corp. is set to invest $33 billion in a natural gas power station in Ohio, which would become the world's largest non-renewable power station. An additional $2.1 billion will be allocated for a crude oil export terminal [2]. Japan's Energy Policy - Japan's energy strategy appears contradictory, as it continues to support fossil fuel projects despite international commitments to reduce such financing. The Japan Bank for International Cooperation (JBIC) has been labeled the "dirtiest foreign financier" in Southeast Asia, contributing significantly to coal and gas financing [4][5]. - The Japanese government is relying on biomass and ammonia to decarbonize, while still heavily depending on coal, which only marginally reduces emissions and increases costs [6][7]. Market Dynamics - Japan's domestic market for renewable energy has shrunk, with major companies like Sharp, Panasonic, and Kyocera exiting solar panel production due to competition from Chinese firms. The installation of solar capacity has dropped to just four gigawatts in 2024, the lowest since 2012 [8]. - The wind energy sector in Japan is also underperforming, facing opposition from local stakeholders, and major players like Mitsubishi Heavy Industries have fallen behind international competitors [9]. Regulatory Environment - The oligopolistic nature of Japan's utility sector has led to regulatory capture, hindering the entry of cleaner energy competitors and maintaining the status quo of fossil fuel reliance [10]. Energy Security Concerns - Japan's heavy dependence on energy imports poses significant risks, especially in geopolitical tensions, as it produces only 13% of its energy domestically. In the event of a conflict, Japan's energy inventories could be depleted rapidly, highlighting the need for a transition to renewable energy sources [11][12][13]. Historical Context - Previous Japanese strategists recognized the risks associated with energy insecurity. Current policies aligning with fossil fuel interests may exacerbate these vulnerabilities, impacting both Japan and global efforts to transition to clean energy [14].

Core Insights - Energy stocks have been volatile for investors due to a disconnect between consumer spending and investor capital allocation, with consumers experiencing the energy transition through tangible products while investment focuses on upstream markets [2] - The ongoing energy transition is often misunderstood as a binary choice between fossil fuels and renewable energy, but institutional investors recognize the need for a comprehensive approach that includes both [3] - Investors face a decision between prioritizing stable income from existing hydrocarbon systems or pursuing long-term growth associated with carbon-free energy generation and data center demand [4] Company Analysis - **Energy Transfer**: In Q4 2025, Energy Transfer generated approximately $4.2 billion of adjusted EBITDA, reflecting a year-over-year increase of about 7.7%. The company provides stable, fee-based cash flows tied to natural gas and NGL infrastructure, which are essential for global energy demand [5][6] - **Constellation Energy**: This company is leveraging its nuclear fleet to secure long-term contracts with AI data centers, positioning itself as a key supplier of 24/7 clean energy. It represents a growth opportunity in the carbon-free generation space [5]

Key Takeaways Caterpillar posted record Q4 2025 revenues of $19.1B, up 18%, with EPS returning to growth.CAT guides 2026 revenues near upper 5-7% CAGR, anticipates a $2.6B tariff impact.Deere faces a 2026 net income decline and tariff costs, with earnings estimates trending lower.Caterpillar Inc. (CAT) and Deere & Company (DE) remain two of the most prominent players in the heavy machinery space. Caterpillar, widely recognized for its yellow equipment, caters to diverse end markets such as construction, min ...

Core Viewpoint - Eramet faced significant challenges in 2025 due to global macroeconomic headwinds, cyclical lows in core commodities, and a weakening dollar, which adversely affected profitability and cash generation. However, the company achieved key milestones in its strategic roadmap, particularly in lithium production and positive mining initiatives [3][4]. Financial Performance - Adjusted EBITDA for 2025 was €372 million, down 54% from 2024, primarily due to unfavorable price and exchange rate impacts, particularly in manganese [5][29]. - Net income attributable to the Group was -€477 million, with a net income of -€370 million when excluding SLN, reflecting a significant decline in EBITDA and asset impairment charges [5][29]. - Adjusted Free Cash Flow was -€481 million, influenced by construction capex for the lithium plant and tax disbursements [5][31]. Operational Highlights - The ramp-up of lithium production at Centenario achieved close to 75% of design capacity by December 2025, marking a significant operational milestone [5][100]. - The Eramet Grande Côte site in Senegal achieved the IRMA 50 performance level, aligning with the Group's Act for Positive Mining vision [4][16]. Strategic Initiatives - The ReSolution program was launched to improve operational performance, cash generation, and safety, with a target of delivering an initial EBITDA improvement potential of €130-170 million within two years [10][13]. - A funding plan was approved to enhance cash generation and strengthen the balance sheet, focusing on strict capital allocation, deleveraging, and targeted investments [7][11]. Market Trends - The global manganese ore price index averaged $4.5/dmtu in 2025, down 18% from 2024, reflecting a surplus in the supply/demand balance [50][60]. - Global electric vehicle sales increased by 20% in 2025, driving demand for lithium, which reached 1,533 kt-LCE, up 31% year-on-year [96][97]. Future Outlook - For 2026, Eramet targets manganese ore transportation volumes between 6.4 and 6.8 million tonnes, with a cash cost forecast between $2.4 and $2.6/dmtu [61][62]. - The lithium market is expected to continue growing, driven by the adoption of electric vehicles, with a projected sales penetration rate of 60% in China by 2026 [102].

Core Viewpoint - Orrön Energy is navigating a challenging market environment characterized by price volatility and increased operational costs, while making progress in project sales and securing grid connections for future growth [7][8][12]. Financial Performance - For the year 2025, Orrön Energy reported a revenue from power generation of MEUR 24.9, a decrease from MEUR 25.7 in 2024, while project sales contributed MEUR 4.0 [4]. - The company recorded a proportionate EBITDA of MEUR -4.5 for the year, impacted by lower power generation volumes and higher balancing costs [12]. - Proportionate net debt stood at MEUR 89, with a liquidity headroom available through a MEUR 170 revolving credit facility [6]. Operational Highlights - Proportionate power generation amounted to 800 GWh for the year, with total generation including ancillary services reaching 839 GWh [5][9]. - The company secured grid connections for six large-scale solar and data center projects in the UK, with a combined capacity of 2.9 GW [5][11]. - Agreements were made to sell three German solar projects totaling 234 MW for up to MEUR 14, contributing to a total of MEUR 18 in project sales agreements for the year [5][10]. Market Conditions - The market conditions in the Nordics remained challenging, with an average realized price of EUR 36 per MWh in 2025, reflecting significant price volatility [8]. - The company implemented operational strategies to manage price volatility, including voluntary curtailments, which improved financial performance despite impacting production volumes [8][9]. Future Outlook - The company anticipates proportionate power generation in 2026 to be between 800 and 950 GWh, considering uncertainties such as weather variability [9]. - There is optimism regarding higher electricity prices and a strong futures price for 2026, alongside expectations of significant returns from the greenfield business [13].

Core Insights - The global borates market is tightly controlled by Turkey, which holds about 70% of global reserves and 65% of production, making it a critical player in the industry [1] - The U.S. boron supply faces challenges such as rising costs and declining grades, while demand for boron in various sectors is increasing, highlighting the importance of supply security and reliability [1] - Fort Katy is positioned as a long-life, scalable U.S.-based asset that aligns with national supply chain priorities, enhancing its attractiveness in the current market [1] Market Dynamics - Boron has been designated as a critical mineral in the U.S., leading to increased engagement with federal agencies and a shift in discussions towards national supply chain security [5][6] - The demand for boron-based materials is expanding across sectors like energy transition technologies, advanced manufacturing, and national defense [1][5] Company Developments - 5E Advanced Materials Inc. is making significant progress towards a final investment decision (FID) for the Fort Katy project, with advancements in engineering and mineral resource estimates [2][8] - The company has filed a patent for its in-situ leaching mining process, which differentiates it as a next-generation boron producer [2][10] - Successful trials and customer validations have led to ongoing commercial discussions, indicating a shift towards structured offtake agreements rather than just technical qualifications [10][11] Financing and Strategic Engagement - The company is actively pursuing federal financing opportunities, leveraging the critical minerals designation to access larger capital pools [3][6][11] - Engagement with the U.S. Export-Import Bank and the Department of Energy is ongoing, with applications submitted for funding under programs supporting advanced mining technologies [6][7] Project Readiness and Future Outlook - The Fort Katy project is on track with a nearly 40-year mine life based on proven reserves, and the company is focused on ensuring it is construction-ready [8][9] - The company aims to convert customer engagement into structured agreements and continue advancing its pre-FID and FEED work streams [11][12] - The strategic focus includes developing a specialty boron stream, particularly ferroboron, to meet market demands [11]

Market Overview - Stocks showed a mixed performance with the Dow Jones Industrial Average up by about 18 basis points, NASDAQ Composite increasing by approximately 0.33%, and S&P 500 rising by 0.3% [2][4] - The Russell 2000 index also climbed into positive territory, reflecting a broader market recovery [3] - The bond market remained stable, with the 30-year T-bond yield down to 4.69% and the 10-year yield around 4.06% [3] Sector Performance - Financials led the large-cap sectors, with notable gains from JP Morgan (up 1.5%), Goldman Sachs, and American Express [4][8] - The technology sector saw mixed results, with Nvidia up nearly 2% and Apple rebounding by 3.76%, while Tesla and other mega-cap tech stocks faced declines [5][6] - Defensive sectors like staples, energy, and materials experienced losses of over 1% [4] Investment Sentiment - Investor sentiment is characterized as cautious, with a significant sector rotation observed from software to hardware and safer areas like materials and energy [10][11] - Small and mid-cap stocks are expected to show greater earnings growth compared to large caps, driven by AI infrastructure and other growth areas [18] BHP Financial Results - BHP reported a 22% increase in first-half profit, with copper now accounting for over 50% of its core earnings, indicating a strategic pivot towards copper production [33][34] - The company plans to increase copper production guidance for this year and next, capitalizing on strong copper prices [36] - BHP's operational performance remains robust, with record production and shipment in iron ore alongside copper growth [36][45] Copper Market Dynamics - The demand for copper is expected to grow significantly, driven by energy transition and digitization, with projections of a 70% increase over the next 25 years [38] - Supply challenges are anticipated due to lower grades and the complexity of new projects, enhancing the demand-supply dynamics for copper [39] Gold and Byproducts - BHP's copper deposits also yield significant byproducts, including gold, which contributed around $2 billion to earnings in the last half [41] - The company is actively seeking to unlock additional value from its portfolio, including a recent $4.3 billion silver stream agreement [42] Iron Ore Negotiations - BHP is engaged in tough negotiations with China's state-owned iron ore buyer but has managed to maintain strong production and price realization [45]