Rio Tinto (NYSE:RIO) (GB:RIO) (AU:RIO), the world’s second-largest miner, is facing a class action lawsuit over its shuttered Panguna mine in Bougainville and quite a bit of activist investor heat this week.
A Major Lawsuit
The Panguna mine in Papua New Guinea was shuttered in 1989 amid militancy challenges. In 2016, Rio Tinto offloaded its majority stake in the mine’s operator, Bougainville Copper. However, decades later, the ghosts of Bougainville (where Panguna is located) are back to haunt RIO.
The miner is facing a class action lawsuit from over 3,000 residents of Bougainville over environmental damages and losses to the villagers, according to the Wall Street Journal. Back in 2021, RIO agreed to an independent assessment of the legacy impact of the mine. It is still awaiting the findings.
And Heat from Palliser
In another development, Palliser Capital is seeking a shakeup at RIO. James Smith, Palliser’s Founder, opined that RIO should abandon its listing in London and consolidate its corporate structure in Australia. With a $180 million stake, RIO is one of Palliser’s most significant holdings, according to Bloomberg. Smith lamented that RIO stock is undervalued compared to its peers owing to its dual-listing.
Interestingly, RIO’s fellow miner BHP (NYSE:BHP) (AU:BHP) carried out a similar move nearly two years ago.
What Is the Target Price for RIO Stock?
Rio Tinto’s share price is up by nearly 27% over the past year amid soaring commodity prices. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average RIO price target of $77.63.
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