Rio Tinto (RIO) vs BHP comparison on the London Stock Exchange. Iron ore vs diversified — which UK mining giant to own in the commodity cycle?
Rio Tinto is the more focused iron ore play, with the Pilbara operations in Australia delivering some of the world's lowest-cost iron ore. The dividend is policy-driven and typically higher than BHP's.
BHP's copper exposure (Olympic Dam, Escondida) is growing as a proportion of earnings, providing leverage to the copper cycle alongside iron ore. BHP is investing heavily to become a global copper champion.
| Factor | Rio Tinto (RIO) | BHP |
|---|---|---|
| Iron ore % | ~60% of EBITDA | ~50% of EBITDA |
| Copper growth | Moderate (Oyu Tolgoi) | High — Escondida + Olympic Dam expansion |
| Dividend yield | ~6.5% (progressive policy) | ~5.5% |
| Iron ore cost | ~$20/t (world-class Pilbara) | ~$18/t (lowest) |
| 2020-22 return | +127% | +308% |
| ESG controversy | Juukan Gorge (resolved) | Lower controversy |
Iron ore at $96/t is in neutral territory — above the buy zone ($80/t) but well below the sell zone ($130/t). Both Rio Tinto and BHP are fairly valued at this level. The key catalyst for either would be a significant move in iron ore driven by China stimulus or steel production cuts.
For informational purposes only. Not financial advice. See disclaimer.