Rio Tinto plc Sponsored ADR (RIO.US) new CEO seeks a $10 billion reinvestment plan, shrinking the lithium business and returning to the main channels of iron ore and copper.

Mining giant Rio Tinto plc Sponsored ADR (RIO.US)s new CEO Simon Trott outlined a plan to raise up to $10 billion to reinvest in core businesses while scaling back ambitious goals, including the lithium business, in order to create a streamlined mining company focused on core areas such as iron ore and copper. Rio Tinto plc Sponsored ADR listed a series of key cost-cutting targets and stated that they will release $5 billion to $10 billion in "cash proceeds" from their asset base through asset divestments, selling minority stakes, and restructuring existing financing. Trott mentioned that these funds will be reinvested in the group. Trott stated that the group will take a "staged advancement strategy" for lithium, a crucial metal for rechargeable batteries. As the only diversified mining company betting on lithium materials, Rio Tinto plc Sponsored ADR plans to focus on ongoing projects with a target of reaching an annual production of 200,000 tons by 2028. Given the significant drop in lithium prices due to market oversupply, the group also added that additional funds will only be invested "if supported by market and returns." Trott said, "The key is focusing on the biggest opportunities for us. If you try to do everything, you end up achieving nothing." It is reported that assets being reviewed by Rio Tinto plc Sponsored ADR include the group's titanium and borate business. Rio Tinto plc Sponsored ADR announced plans to reduce average operating unit costs by 4% per year by the end of this decade. Other improvement measures include simplifying internal operations, suspending non-core projects and research, and achieving a $650 million production efficiency improvement by the end of the first quarter next year. Trott, who previously managed Rio Tinto plc Sponsored ADR's iron ore division, aims to streamline the organization, which critics view as becoming bloated in recent years, especially in support functions. He has reduced department headcounts, cut some senior staff, and begun divesting or shutting down non-core businesses. Glyn Lawcock, Head of Metals and Mining Research at Barrenjoey Markets Pty Ltd., said, "They mentioned sale and leaseback schemes for infrastructure such as power stations and desalination plants. There's potential for capital cost arbitrage. I think Trott's approach is the right one."