Rio Tinto vs South32: Which ASX Stock Looks Better Now?

Rio Tinto and South32 offer different strengths, with one focused more on scale and income, while the other provides greater exposure to growth opportunities.

Both companies have exposure to important metals and mining operations, but their recent developments highlight different areas of focus. Rio Tinto is strengthening its long-term aluminium position while delivering strong first-half financial results, whereas South32 is simplifying its portfolio and progressing a number of growth opportunities.

Rio Tinto: Strong Results and Long-Term Aluminium Focus

Rio Tinto Limited (ASX: RIO), on 13 August 2026, announced an agreement to secure the long-term future of Tomago Aluminium in New South Wales.

The agreement involves energy security until 2038 through a 10-year power purchase agreement (PPA), beginning when the existing agreement expires on 31 December 2028. Energy would be provided through 100% renewable resources from 2033 onwards.

Tomago will invest A1.1billionthrough2038,includingA100 million for decarbonisation. The smelter will also continue providing demand response services.

In March 2026, Rio Tinto reached a separate agreement with the Australian and Queensland governments covering the Boyne aluminium smelter at Gladstone.

Together, these arrangements give Australia’s two largest aluminium smelters a pathway to longer-term, cost-competitive and lower-carbon power.

From 2033, renewable electricity at Tomago is expected to reduce its Scope 1 and 2 operating carbon emissions by 7.1 million tonnes annually.

Tomago is jointly owned by Rio Tinto, Gove Aluminium Finance and Norsk Hydro.

Rio Tinto’s First-Half 2026 Performance

Rio Tinto also delivered strong financial results for the first half of 2026.

The company recorded a 28% increase in EBITDA to $14.8 billion and a 75% increase in free cash flow to $3.8 billion. Copper equivalent production grew 3%, while productivity benefits reached $870 million.

Rio Tinto declared a $3.4 billion interim ordinary dividend, representing an increase of 43%.

Its market capitalisation was cited at around $60.62 billion, with a 4.07% fully franked dividend yield.

These results highlight the company's scale and its focus on shareholder returns alongside its ongoing investments across the business.

South32: Simplifying the Portfolio and Expanding Growth Opportunities

South32 Limited (ASX: S32) provided a business update dated 15 September 2026, highlighting its position as a base metals company focused on copper, zinc and silver.

Its portfolio includes long-life operations in copper, zinc, silver and lead, along with manganese.

Projects currently under construction are expected to increase production volumes by about 55%. Further copper and zinc opportunities are also moving through study and exploration stages.

South32 said its portfolio is becoming simpler, with operations concentrated in Australia, Chile and the USA.

The company produces five minerals listed as critical by multiple developed nations and trading blocs. Its presence in the Americas is growing through Sierra Gorda, Hermosa and the Ambler Metals joint venture.

The business also has lower greenhouse gas emissions exposure.

South32’s Simpler Operating Model

South32 is moving from a functional structure to an asset-led operating model, giving operations more responsibility for local decisions and performance.

The organisational centre will focus on technical excellence and enterprise activities, while functional support roles are being reduced. The aluminium value chain will be managed separately.

This simpler structure is expected to lower annual overhead costs by about US$125 million.

The company also cited balance sheet flexibility for growth projects and shareholder returns.

South32's dividend yield was 1.94%, fully franked, with recent payments showing regularity.

Rio Tinto vs South32: Which Is the Better Buy?

Rio Tinto and South32 offer different investment characteristics.

South32 may provide more value to investors interested in growth and momentum, while Rio Tinto will cater more to those interested in a bigger firm that concentrates more on dividends.

Rio Tinto's recent results highlight its scale, strong first-half cash generation and dividend growth, while its Tomago agreement provides a long-term pathway for the aluminium smelter.

South32, meanwhile, is simplifying its portfolio, reducing annual overhead costs and progressing projects that are expected to increase production volumes.

The choice therefore depends on whether investors place greater emphasis on growth and momentum or scale and dividend income.