Palliser, a radical investment fund, increases pressure on Rio Tinto plc Sponsored ADR (RIO.US): Urging the acquisition of Teck Resources and abandoning the dual-listed structure to create a "copper industry giant".

According to a letter obtained, the activist investment fund Palliser Capital has increased pressure on Rio Tinto plc Sponsored ADR group (RIO.US), urging the mining giant to launch a "once in a lifetime" counter-acquisition offer to bid for Teck Resources (TECK.US); it also urges Rio Tinto plc Sponsored ADR to streamline its dual-listed structure and spin off its base metals business to create a copper giant. In the letter dated October 17th, Rio Tinto plc Sponsored ADR shareholder Palliser calls on the company to challenge the merger agreement reached between Teck Resources and Anglo American Resources Group (NGLOD.US) to gain control of a set of prime copper mining assets - the combined copper mining assets are expected to have an annual production of up to 1.3 million tons. Sources disclosed that Palliser holds about $400 million in shares of Rio Tinto plc Sponsored ADR, representing less than 1% of the total shares. The fund has confirmed the authenticity of the letter but declined to comment further. The letter points out that this acquisition will help Rio Tinto plc Sponsored ADR diversify its business away from iron ore dependency; it will also unlock cost synergies of at least $800 million, accelerate the copper business growth process by ten years at a lower risk and cost than greenfield expansion (new projects), enabling Rio Tinto plc Sponsored ADR to better adapt to the global Clean Energy Fuels Corp. transformation trend. In response to the letter, Rio Tinto plc Sponsored ADR group stated that the company is still focused on "maximizing value for shareholders" and will provide updates on strategic progress at the "Capital Markets Day" event in five weeks. Rio Tinto plc Sponsored ADR also stated that the arguments presented by Palliser regarding its dual-listed structure have been extensively discussed among shareholders and have been voted down by shareholders. The letter states: Canceling the dual listing is a prerequisite for acquisition. According to Palliser's Teck Resources counter-acquisition plan, Rio Tinto plc Sponsored ADR, currently dual-listed in London and Sydney, needs to be consolidated into a single holding company based in Australia; and eventually split into two entities: one based in Canada focusing on copper, aluminum, and zinc operations; and the other based in Australia focusing on iron ore operations. Palliser has been pushing for over a year to consolidate Rio Tinto plc Sponsored ADR's listed structure. The fund stated in the letter that Rio Tinto plc Sponsored ADR's dual-listed structure makes it infeasible to make a takeover bid for Teck Resources in stock form, forcing Rio Tinto plc Sponsored ADR to choose alternative solutions that are more expensive or involve dilution of equity. The letter states: "Consolidating the listed structure is not an optional choice - it is a prerequisite for any credible strategic acquisition." It also urges the Rio Tinto plc Sponsored ADR board to take action quickly before the finalization of the merger agreement between Anglo American Resources and Teck Resources. The letter also calls for a business split. The letter points out that splitting Rio Tinto plc Sponsored ADR into two entities can unlock "trapped value" and attract new investors seeking stocks in a pure copper business. The letter states: "Rio Tinto plc Sponsored ADR can easily make a significantly higher offer - including a reasonable premium at the beginning, while giving Teck Resources shareholders the opportunity to participate in the potential valuation reassessment of Rio Tinto plc Sponsored ADR after the spin-off of 'Future Metals Co'." The merger agreement reached between Anglo American Resources and Teck Resources did not offer a premium to shareholders, and shareholders are scheduled to vote on the deal on December 9th. Sources revealed that Palliser holds a small stake in this Canadian mining company (Teck Resources). The fund did not respond to requests for comment on this stake. At Rio Tinto plc Sponsored ADR's 2025 annual shareholders meeting, shareholders overwhelmingly voted against Palliser's proposal to "review the dual-listed structure" and chose to support the board. At that time, the Rio Tinto plc Sponsored ADR board mentioned tax considerations, stating that a single listing structure is costly and cannot provide the flexibility for large acquisitions as claimed by Palliser. Rio Tinto plc Sponsored ADR stated on Monday: "Rio Tinto plc Sponsored ADR strongly denies all baseless claims made regarding the quality of the analysis submitted to shareholders by Palliser."