RIO Conducting Site Visit To Australian Coal Assets
Analysts at JP Morgan reiterate their "overweight" rating on Rio Tinto plc (LON: RIO). The target price for RIO is set to 4900p.
According to JP Morgan, the company has pointed to the well-worn themes of emerging market GDP and power consumption growth, driven by industrialization and urbanization, to back up its positive view on thermal coal demand going forward. Over time TIO expects coal's share of the power generation capacity to fall in China, although in absolute terms, demand is expected to more than double to 6.6bnt by 2030. Indian imports are also expected to grow strongly (double over the next five years) to meet coal-fired generation capacity goals, the analysts say.
“However, all expansion projects are currently under review as a result of the proposed RSPT and management commented that it is impossible to make any investment decision until there is more clarity on the impact,” the analysts mention.
