Rio Tinto stock drops more than 2% after renegotiated Oyu Tolgoi shareholder loan with Mongolian government

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Rio tinto slides 2.00% today

Highlights

Rio Tinto and the Mongolian government agreed to adjust the shareholder loan interest rate for the Oyu Tolgoi project, impacting future cash flows.
Fiscal 2024 saw underlying EBITDA of approximately $29.5 billion and total cash dividends of about $10 billion distributed.
Shares face sustained selling pressure with strong bearish momentum, trading just above major support and expected to consolidate between GBX6,261 and GBX6,951 over the next week.

Broader selling persists amid adjusted Oyu Tolgoi terms and merger talks

Rio Tinto and the Mongolian government reached an agreement adjusting the interest rate on the shareholder loan for the Oyu Tolgoi copper and gold project, in which Rio Tinto holds a 66% stake. In fiscal 2024, underlying EBITDA was reported at approximately $29.5 billion and total cash dividends paid were about $10 billion. Merger discussions with Glencore were confirmed as restarted, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees clear evidence of sustained weakness in Rio Tinto. He highlights that despite the positive news with the Mongolian government, technical and sentiment factors remain negative. Persistent selling below the 20- and 50-day averages and the failure of long-term support are concerning. Key momentum indicators point to sellers firmly in control. "Current bearish momentum and lack of buyer conviction make any immediate recovery unlikely—downside risk dominates for now."

Viktoras Karapetjanc, expert at Traders Union, views the recent agreement with the Mongolian government as a positive catalyst. He notes that Rio Tinto's underlying EBITDA and dividends remain strong, supporting long-term value. In his opinion, the market's reaction is short-term and overlooks strategic opportunities tied to renewed merger talks. "The bullish structure remains intact and the company is well positioned for further growth once sentiment stabilizes."

Parshwa Turakhiya, analyst, observes heightened selling and technical weakness in the short term. He points to momentum measures and price gaps that reinforce the pressure. However, he emphasizes the importance of watching the GBX6,568 support and volatility for a potential tactical setup. "If buyers re-emerge near GBX6,568, there could be a quick rebound opportunity—but for now, caution is warranted."

Sustained bearish momentum as price breaches key technical levels

Rio Tinto is trading below its 20-day (GBX7,009) and 50-day (GBX7,497) moving averages, highlighting sustained short- and medium-term selling, while maintaining a position just above the 200-day moving average (GBX6,568) for residual long-term support. The Ichimoku Kijun at GBX6,818 is acting as resistance, with support at MA-200 (GBX6,568) and near-term resistance at today’s low (GBX6,607). Momentum indicators, including MACD and ADX, confirm strong selling pressure. The RSI at 37.67, CCI at -53.86, and Stochastic RSI at 72.32 all suggest a continuation of the bearish trend. Bull/Bear Power shows sellers dominating and signals an intraday oversold condition. The downside gap of around GBX85 (1.26%) and a session drop to near GBX6,606, with volatility at 1.12%, reinforce the sustained downward momentum and lack of buyer engagement.

Earlier, analysts noted that Rio Tinto’s share price was facing sustained selling pressure amid strong output and the emergence of logistical concerns. The latest developments—especially the weakened long-term technical status and the impact of the Oyu Tolgoi loan agreement—add further downside risk, making a decisive move below the 200-day moving average a key trigger to watch in the near term.

Source of Data: RIO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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