'Stronger, sharper, and simpler': Rio Tinto shares fall despite major update

Rio Tinto Ltd (ASX: RIO) shares are under pressure on Friday morning.

At the time of writing, the mining giant's shares are down 2% to $137.83.

Why are Rio Tinto shares falling?

Investors have been selling the company's shares today following the release of its 2025 Capital Markets Day presentation.

That presentation outlined Rio Tinto's strategy to deliver industry leading returns by becoming stronger, sharper, and simpler.

This includes the miner's chief executive, Simon Trott, detailing how Rio Tinto will unlock its full potential to become the most valued metals and mining business through a strategy that starts with having the right assets in the right markets, supported by a diversified model that delivers market-leading performance and industry-leading returns.

What is the plan?

Rio Tinto revealed that there are three strategic pillars focused on driving a step change in performance and returns.

One is operational excellence, which will see Rio Tinto streamline to three world class businesses – Iron Ore, Copper, and Aluminium & Lithium. It will have a relentless focus on productivity and leveraging best in class ore body knowledge.

Another strategic pillar is focused on project execution. It aims to create new options for organic growth by delivering projects reliably, efficiently, and at scale.

Finally, capital discipline will be another focus. It notes that it will continue to allocate capital with rigor and maintaining a strong, resilient balance sheet, with leading returns.

Delivering value

Rio Tinto also revealed that it is looking to deliver value through a number of areas. This includes production growth, productivity benefits, and asset sales.

With respect to the latter, the company advised that it is looking at an opportunistic release of US$5 billion to US$10 billion from existing asset base.

It notes that it will aim to release cash where third-party funding is lower than the cost of capital. This includes exploring commercial, partnership, and ownership options across land, infrastructure, mining, and processing assets.

It adds that the strategic reviews of Iron and Titanium, and Borates are advancing as planned, with the next phase focused on testing the market for these assets.

Commenting on its plans, Simon Trott, said:

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

We are delivering strong early productivity benefits and cost savings with more to come. Freeing up cash from our asset base where it makes sense will strengthen the balance sheet and maintain returns, as we invest for the future with discipline. Our experienced leadership team is committed to delivering against our mission to become the most valued metals and mining company – for shareholders, the people who work with us, our partners and the communities around us.

The post 'Stronger, sharper, and simpler': Rio Tinto shares fall despite major update appeared first on The Motley Fool Australia.

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