Rio Tinto to modernize Quebec hydro plant with $1.2 billion

ALMA, Canada - Rio Tinto (Market cap: $101.29B) announced a significant investment to modernize its Isle-Maligne hydroelectric power plant in Alma, Quebec, with a commitment of US$1.2 billion. This marks the company’s largest investment in hydroelectric assets since the 1950s and aims to secure the long-term future of low-carbon aluminum production in the Saguenay–Lac-Saint-Jean region. According to InvestingPro data, Rio Tinto maintains strong financial health with an EBITDA of $19.06B and operates with moderate debt levels, supporting its capability to fund such strategic investments.

The modernization project, set to complete by 2032, will involve overhauling the power plant’s infrastructure, including the replacement of eight turbine-alternator groups and the rehabilitation of water intake and hydraulic passage systems. Additionally, the construction of an extension and mechanical workshop to the north of the power station, the replacement of electrical and mechanical equipment, and modifications to a spillway for reliable winter use are planned. The company’s robust current ratio of 1.63 and strong cash flows indicate its capacity to maintain such long-term infrastructure investments while continuing to reward shareholders with a substantial 7.19% dividend yield.

This initiative is expected to peak with more than 300 workers on-site and is critical for maintaining a safe and efficient supply of renewable energy to Rio Tinto’s smelters and other facilities. It also underscores the company’s commitment to protecting its assets and maintaining safe operations for employees and the community.

Sébastien Ross, Rio Tinto Aluminium’s Managing Director for Atlantic Operations, highlighted the power plant’s century-long strategic significance and the investment’s role in ensuring the competitiveness of Quebec’s low-carbon aluminum production for the North American market.

The investment complements an additional $183 million allocated for refurbishing butterfly valves and updating two other turbine-alternator groups at the Isle-Maligne power plant, as previously announced.

With seven hydroelectric facilities in Quebec and British Columbia, Rio Tinto stands as one of Canada’s largest private hydroelectricity producers. The company’s access to hydropower is a competitive advantage, enabling the production of some of the world’s lowest carbon aluminum. An eighth station provides power to the company’s port operations in Sept-Îles, Quebec. InvestingPro analysis suggests Rio Tinto is currently undervalued, with multiple additional ProTips and detailed financial metrics available for subscribers. For comprehensive insights into Rio Tinto’s financial health and growth potential, access the full Pro Research Report, part of InvestingPro’s coverage of over 1,400 top stocks.

This announcement is based on a press release statement from Rio Tinto.

In other recent news, Rio Tinto has faced challenges and opportunities in its operations. The company reported that its Pilbara iron ore shipments were impacted by extreme weather events, specifically four cyclones in the first quarter of 2025, leading to an expected shipment volume at the lower end of guidance. To mitigate this, Rio Tinto plans additional investments of approximately A$150 million. Despite this setback, the Oyu Tolgoi copper mine achieved record production, and bauxite operations also set new production records in March. Rio Tinto maintained its 2025 production guidance across all segments, although Pilbara shipments are expected to be lower. The company also highlighted advancements in its growth projects, including the start of iron ore production at Western Range and progress on the Simandou project. Additionally, Rio Tinto recently completed the acquisition of Arcadium, leading to the formation of Rio Tinto Lithium. JPMorgan has reiterated its Overweight rating for Rio Tinto, with a price target of GBP59.20, noting the potential for significant growth if commodity prices remain stable.

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