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Rio Tinto Shares (LON: RIO) Have Strong Day – Expanding Footprint in Battery Minerals

Analyst Team trader
Updated 3 Jul 2024

Rio Tinto shares (ASX, LON: RIO) ended the day as one of the better performers on the UK markets, with a 2.96% gain. In a significant move to strengthen its resources in the critical minerals sector, the leading mining company announced an investment of A$18.5 million ($12.4m) to enlarge its stake in Sovereign Metals (ASX: SVM) (LON: SVML), a company based in Australia that is advancing the Kasiya rutile-graphite project in Malawi.

This investment will increase Rio Tinto's shareholding in Sovereign to 19.76% and comes as part of Rio Tinto's strategic focus on battery minerals.


The Kasiya project, which is considered one of the largest natural rutile deposits in the world, is pivotal for Rio Tinto's interest due to its significance in the battery minerals market. It has been reported that the Kasiya orebody harbors 1.8 billion tonnes at 1% rutile and 1.4% graphite.

These materials are highly sought after for a wide range of industrial and technological applications, which includes solar panels, paint, and the aerospace industry owing to rutile's impressive thermal stability.

Rio Tinto's additional funding is designed to unlock significant supplies of these low-carbon footprint natural critical minerals. This financial move marks a continuation of Rio Tinto's involvement with Sovereign Metals, following an initial acquisition of a 15% stake one year prior, amounting to A$40.4 million ($27m).

Frank Eagar, the managing director of Sovereign, has expressed that Rio Tinto's involvement has greatly aided in the advanced development of the Kasiya project. Furthermore, Rio Tinto not only holds a considerable share in Sovereign but also provides valuable technical and marketing guidance to bolster the project's progression.

As a global mining leader, Rio Tinto already operates titanium dioxide production from rutile at its facilities located in Madagascar, South Africa, and Canada. Titanium, derived from rutile, is particularly valued for its robustness and ability to withstand temperature extremes, which translates into a broad range of industrial uses.

The investment signifies Rio Tinto's commitment to securing a strong foothold in the battery minerals sector, which is garnering increased attention as the world moves towards cleaner energy and electric mobility. Through strategic partnerships and resource development, Rio Tinto is set to play a crucial role in the supply of materials essential for the burgeoning technology and renewable energy industries.

The backing of Sovereign Metals' Kasiya project demonstrates the company's adaptive strategy toward the evolving demands of global markets and the transition towards sustainable energy resources.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.