Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.</li>
<li>With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. </li>
<li>We also remain bullish on the 65-62 spread, which has expanded to the teens. <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> and <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a>  are good plays on the spread.</li>
</ul>


Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.
With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. 
We also remain bullish on the 65-62 spread, which has expanded to the teens. Rio Tinto Ltd (RIO AU) and Vale (VALE US)  are good plays on the spread.


Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

<ul>
<li>Investics Research will initiate coverage of the materials sector in April 2024, starting with iron ore and then gold, coal, and steel in subsequent months (in that order).</li>
<li>The areas of coverage on asset classes will encompass the underlying commodity and the associated equities. </li>
<li>Areas of differentiation would include in-depth coverage of all equities (small/mid and large cap) and actionable tactical ideas on the commodity.</li>
</ul>


Investics Research will initiate coverage of the materials sector in April 2024, starting with iron ore and then gold, coal, and steel in subsequent months (in that order).
The areas of coverage on asset classes will encompass the underlying commodity and the associated equities. 
Areas of differentiation would include in-depth coverage of all equities (small/mid and large cap) and actionable tactical ideas on the commodity.


Introduction: Initiation of Coverage in the Materials Sector

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The shareholder vote failed, but momentum builds: Despite only 19.35% support, institutional backing signals growing pressure on Rio Tinto’s board to revisit the dual-listed company structure in future.</li>
<li>Valuation gap widens, thesis strengthens: With RIO Ltd trading at a 23.2% premium over RIO plc, the economic case for unification — and the relative value trade — becomes increasingly compelling.</li>
<li>Not statistical arbitrage, but event-driven optionality: The long plc / short Ltd setup lacks persistent mean reversion but offers asymmetric upside if governance shifts, tax changes, or structural catalysts force convergence.</li>
</ul>


The shareholder vote failed, but momentum builds: Despite only 19.35% support, institutional backing signals growing pressure on Rio Tinto’s board to revisit the dual-listed company structure in future.
Valuation gap widens, thesis strengthens: With RIO Ltd trading at a 23.2% premium over RIO plc, the economic case for unification — and the relative value trade — becomes increasingly compelling.
Not statistical arbitrage, but event-driven optionality: The long plc / short Ltd setup lacks persistent mean reversion but offers asymmetric upside if governance shifts, tax changes, or structural catalysts force convergence.


Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Palliser Capital, which reportedly holds ~$300mn in <strong><a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU/LN)</a></strong> shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.</li>
<li>Palliser's reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.</li>
<li>Shareholders will vote on the resolution on 3rd April  for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.</li>
</ul>


Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
Palliser's reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
Shareholders will vote on the resolution on 3rd April  for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.


Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

Index Rebalance

<ul>
<li>Rio Tinto could remain in the FTSE 100 if it retains a premium London listing and meets FTSE Russell's UK nationality test, despite losing UK incorporation.</li>
<li>BHP's removal from the FTSE 100 in 2022 highlights the importance of maintaining a primary UK listing over UK incorporation alone.</li>
<li>FTSE 100 inclusion supports Rio Tinto’s access to UK and European capital markets, enhancing liquidity and flexibility for future share issuances.</li>
</ul>


Rio Tinto could remain in the FTSE 100 if it retains a premium London listing and meets FTSE Russell's UK nationality test, despite losing UK incorporation.
BHP's removal from the FTSE 100 in 2022 highlights the importance of maintaining a primary UK listing over UK incorporation alone.
FTSE 100 inclusion supports Rio Tinto’s access to UK and European capital markets, enhancing liquidity and flexibility for future share issuances.


Mine Over Matter: Will Rio Stay in the FTSE 100?

Australia

Rio Tinto Limited is an international mining company.  The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO LN.

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Rio Tinto Ltd (RIO AU)

Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

We provide our take on the China data like TSF, auto sales and property that led to the sell-off in iron ore. We provide our rationale for an iron...

Sameer Taneja

Introduction: Initiation of Coverage in the Materials Sector

We provide readers with an introduction to our initiation on commodities. We also provide a rationale as to how our coverage will be comprehensive...

Sameer Taneja

Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped

Rio Tinto’s dual listing trades at a 23% gap—structurally unjustified and politically fragile. Long plc / short Ltd offers asymmetric, catalyst...

Jesus Rodriguez Aguilar

Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

Rio Tinto Ltd (RIO AU) shareholders voted down (80.65% against, spread across two meetings in London and Perth) Palliser's proposal to review its...

David Blennerhassett

Mine Over Matter: Will Rio Stay in the FTSE 100?

Rio Tinto could remain in the FTSE 100 if it retains a premium London listing and meets FTSE Russell's UK nationality test, despite losing UK...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

We provide our take on the China data like TSF, auto sales and property that led to the sell-off in iron ore. We provide our rationale for an iron...

Sameer Taneja

Introduction: Initiation of Coverage in the Materials Sector

We provide readers with an introduction to our initiation on commodities. We also provide a rationale as to how our coverage will be comprehensive...

Sameer Taneja

Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped

Rio Tinto’s dual listing trades at a 23% gap—structurally unjustified and politically fragile. Long plc / short Ltd offers asymmetric, catalyst...

Jesus Rodriguez Aguilar

Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

Rio Tinto Ltd (RIO AU) shareholders voted down (80.65% against, spread across two meetings in London and Perth) Palliser's proposal to review its...

David Blennerhassett

Mine Over Matter: Will Rio Stay in the FTSE 100?

​Rio Tinto could remain in the FTSE 100 if it retains a premium London listing and meets FTSE Russell's UK nationality test, despite losing UK...

Jesus Rodriguez Aguilar

Rio Tinto could remain in the FTSE 100 if it retains a premium London listing and meets FTSE Russell's UK nationality test, despite losing UK...