On Dec. 23, Rio Tinto and the Puutu Kunti Kurrama and Pinikura (PKKP) peoples confirmed that they had taken preliminary steps in rebuilding their relationship following the Juukan Gorge destruction in May 2020.
It was disclosed that PKKP in co-operation with Rio Tinto (RIO) have been involved in corrective works at Juukan Gorge.
A joint session of the PKKP and Rio Tinto boards had been held in an attempt to renew their relationship.
PKKP stated that Rio Tinto had taken steps to address the offense and damage caused by the actions which led to the destruction in May 2020 and acknowledged their encouragement by the steps taken by Rio Tinto to date. However, they believe that these are the first of many that will be needed to ensure the non-repetition of the unnecessary destruction of cultural heritage sites, like Juukan Gorge.
Meanwhile, PKKP noted the appointment of former CFO Jakob Stausholm as the new CEO, effective Jan. 1, 2021, and are optimistic that discussions between PKKP and Rio Tinto will continue in a positive direction.
“We know we have a lot of work to do in order to rebuild trust and confidence in our business. I look forward to continuing the work with PKKP Traditional Owners to re-chart our partnership and build a shared future.” said acting chief executive of Rio Tinto Iron Ore, Ivan Vella.
Argus analyst David Coleman raised the price target on RIO from $70 to $82 and reiterated a Buy rating on Dec. 18. The new price target implies an upside of 8%.
The rating was prompted by the strengthening of its operating performance and balance sheet by reducing its costs and selling its non-core assets while also returning cash to shareholders through dividend increases.
Coleman further stated that Rio Tinto had traditionally performed well during difficult economic times and also has strong long-term growth opportunities. (See RIO stock analysis on TipRanks)
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 1 Buy and 1 Hold. The average analyst price target of $77.06 implies an upside potential of 1.5% to current levels. The share price of the metals and mining company has already gained 28% year-to-date.
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