Rio Tinto’s new CEO Simon Trott vows to slash costs and focus only on most profitable segments

Rio Tinto’s new boss has unveiled the mining giant’s most drastic business overhaul in over a decade, promising ‘industry-leading returns’ through sweeping cost cuts.

Simon Trott was elevated to chief executive from head of iron ore. Picture: Bloomberg

Rio Tinto has pledged to deliver “industry-leading returns” as newly installed chief executive Simon Trott unveiled a sweeping strategy of cost-cutting and portfolio pruning, including a substantial reduction in decarbonisation spending.

The plan marks the most drastic reshaping of the business in more than a decade.

Mr Trott, speaking at the group’s 2025 Capital Markets Day, outlined a blueprint for simplifying and sharpening one of the world’s largest miners. At its core, the strategy focuses Rio Tinto on three main product groups – iron ore, copper, and aluminium-lithium – while streamlining management structures, eliminating distractions, and imposing more discipline on its mining operations.

“We are building from a position of strength for Rio Tinto’s next chapter, sharpening and simplifying the business to deliver leading returns,” Mr Trott told investors. “We will drive performance through discipline, productivity and unmatched growth to unlock the full potential of our diversified portfolio of world-class assets.”

The miner is betting that these changes will transform productivity. In the first three months following the reorganisation, Rio Tinto has already secured $US650m ($982m) in annualised productivity gains, including $US370m realised and a further $280m expected by the end of the first quarter of 2026. Management said the savings were achieved by consolidating operations into three product groups, cutting layers of management, and ending projects that no longer fit the company’s renewed strategic focus.

Production growth is expected to accelerate across the portfolio. Rio Tinto forecasts 7 per cent output growth in 2025 and a 3 per cent compound annual growth rate through to 2030. Expansion at the Oyu Tolgoi copper mine in Mongolia, the long-delayed Simandou iron ore project in Guinea, and development of Arcadium and Rincon lithium assets are expected to drive the increase.

At its core, the strategy focuses Rio Tinto on three main product groups – iron ore, copper, and aluminium-lithium. Picture: Jason Edwards / NewsWire

On these foundations, the company expects group EBITDA could rise 40 to 50 per cent by 2030, assuming long-term consensus commodity prices. Copper-equivalent output is projected to increase 20 per cent, while group unit costs are forecast to fall 4 per cent from 2024 levels.

A central pillar of the strategy is a plan to release between $US5bn and $US10bn from the existing asset base. That includes stakes in infrastructure that supports certain mines, though the Pilbara railway – which underpins Rio’s flagship iron ore division – is not expected to be part of any sale. Strategic reviews of the iron and titanium business and the borates unit are also under way, with the next phase focusing on testing the market for potential buyers or partners.

Where Rio is cutting back is almost as notable as what it retains. The company has sharply reduced its 2030 decarbonisation capital estimate, from $US5bn-$US6n down to $US1bn-$US2bn, reflecting a strategic shift toward using third-party capital. Mr Trott said Rio would increasingly rely on renewable energy developers and other partners to shoulder upfront spending while delivering the emissions reductions required under the firm’s climate targets.

The move allows Rio to maintain its climate commitments while limiting capital outlays that do not directly generate shareholder returns. However, it also means some parts of the decarbonisation program will be delayed, including adoption of low-carbon haul trucks and other fleet upgrades in the Pilbara, which are now expected to occur beyond 2030.

“We’ve got really good growth projects, and they need to complete for capital. So we’ll choose the very best of those whilst making sure we maintain our existing asset first,” Mr Trott said.

Rio’s approach mirrors a similar shift at BHP, which reduced a planned $US4bn investment in climate projects to $US500m, without lowering its long-term emissions-reduction targets.

The reset is a clear message by Mr Trott to investors: Rio Tinto is seeking to present itself as a leaner, more coherent miner after a decade marked by uneven operational performance and strategic drift. Sharper asset ownership, clearer operating lines and heightened scrutiny of capital allocation are central to this vision. Whether the overhaul delivers the “industry-leading returns” Mr Trott has promised will become clearer as the decade unfolds. But after years of retrenchment and uncertainty, Rio Tinto is once again trying to define its future – and this time, it is doing so with discipline, cost control, and a radically reshaped investment footprint at the centre of the strategy.

Originally published as Rio Tinto’s new CEO Simon Trott vows to slash costs and focus only on most profitable segments