Could a data leak undermine Rio Tinto’s share price?

Rio Tinto shares have fallen since reaching a 52-week peak of 6,406.00p in January, and investors may be concerned that a possible data leak could put further pressure on the stock. The miner must do more to protect Indigenous cultural heritage at its mines, while investors see growing speculation that Rio Tinto could enter the lithium market.

Rio Tinto’s [RIO.L] share price has slipped 14.49% since hitting a 52-week high of 6,406.00p on 26 January, and there are concerns that a possible data leak could hurt the mining giant’s stock.

The Anglo-Australian miner was also hit by a cultural heritage audit last month, which found that it must do more to protect Indigenous cultural heritage at its mines. Meanwhile, there’s growing speculation that Rio Tinto could enter the lithium market, which could boost its share price prospects.

Despite the decline in the share price from the year high in January, Rio Tinto’s share price is up 11.27% over the last six months, and 23.81% higher than the 31 October 2022 52-week low at 4,424.50p.

Possible cyber-attack dents Rio Tinto share price

Rio Tinto’s share price on the LSE fell 0.81% from its intraday high to 5,288.00p on 23 March, after a Reuters report revealed that personal data of former and current Rio Tinto employees may have been stolen by a cybercriminal group.

A memo to staff revealed that data, including pay slips of a small number of employees from January 2023, may have been seized by as-yet unknown cybercriminals. In the memo, the company admitted that “investigations now indicate a possibility that Rio Tinto data may be impacted”.

The attack’s target was a managed file transfer software called GoAnywhere; a number of other firms and government institutions have reported cybersecurity incidents with this same software over the last few weeks. The cybercriminal group has threatened to release the data, although it’s still not been determined whether the data has been stolen, with the memo stating: “To date, none of the records … have been released, and we still do not know if the cybercriminal group holds these records or not.”

Although it’s clearly not a positive situation, the potentially stolen data appears to be of relatively minor importance, and looks unlikely to have a significant long-term impact on the group. Last week’s 4.28% share price gain may reflect investors’ confidence in a satisfactory outcome.

Audit reveals cultural heritage failings

Rio Tinto has pledged to improve its protection of Indigenous cultural heritage sites following an independent audit, which was commissioned by the miner. The company failed to consistently meet best practice standards, and among other findings, must ensure it co-designs on mining plans with local communities. Rio Tinto also said it will ensure project managers are aware of and responsible for cultural heritage protection, making it part of the decision-making process.

The audit was carried out in 2021 and 2022 across sites in Australia, Canada, Mongolia, South Africa, and the US, and was commissioned after Rio Tinto destroyed culturally significant rock shelters at Juukan Gorge in Western Australia in 2020, as part of an iron ore project.

Could lithium be Rio Tinto’s new best friend?

Lithium miner Albemarle’s [ALB] latest, failed $5.2bn bid for Liontown [LTR] last Monday triggered rumours that the Australian battery metals exploration and development company may ultimately attract a bid from a major global player—with Rio Tinto namechecked as one possibly interested party. After Liontown revealed it had received the A$2.50 share bid last Tuesday, the stock leapt 68.52% to A$2.57, surpassing Albemarle’s bid in the process.

Rio Tinto appears among the most likely of the potential suitors to make a move, according to the Australian Business Review, for what could lead to a major hard rock discovery in Australia. With Rio Tinto having reportedly researched lithium assets over recent years, could Liontown be the one to tempt the miner into investing in the commodity that it has compared to diamonds?

What’s the analyst take on the Rio Tinto share price?

The 20 analysts polled by the Financial Times offering 12-month price targets for Rio Tinto have a median estimate of 5,913.69p, with a high estimate at 7,454.08p, and a low estimate at 3,816.25p. The median estimate suggests a potential upside of 7.95% compared with last Friday’s close at 5,478.00p.

Analysts are split in terms of their outlook on the Rio Tinto share price, with two ‘buy’ and four ‘outperform’ recommendations, along with 13 ‘hold’, three ‘underperform’, and one ‘sell’, for a consensus view of ‘hold’.

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