Rio Tinto's Resolution Copper Play: Riding the Tariff-Driven Reshoring Wave

The U.S. copper tariffs set to take effect on August 1, 2025—targeting imports from Chile, Canada, and Mexico—mark a watershed moment for domestic mining projects. For Rio Tinto (RIO), the joint venture with BHP (BHP) at the Resolution Copper Mine in Arizona has positioned the company to capitalize on a policy-driven shift toward reducing foreign dependence. This article examines how Resolution, one of the world's largest undeveloped copper deposits, could unlock value for investors as tariffs reshape supply chains and regulatory tailwinds gather momentum.

The Tariff Catalyst: Why Domestic Copper Is Critical

The 50% tariff on copper imports is a blunt instrument designed to address a glaring vulnerability: the U.S. imports 53% of its copper needs, with domestic production having declined 20% since 2015. The Department of Defense relies on copper for semiconductors, military hardware, and infrastructure, making self-sufficiency a national security priority.

The immediate impact has been stark. Copper futures have surged to record highs—$5.8955 per pound—due to speculative buying ahead of the tariff. This price spike, however, risks demand destruction in industries like construction and EV manufacturing. Yet, over the long term, tariffs could reshore manufacturing, creating a sustained market for domestic copper producers like Rio Tinto.

Resolution Copper: Scale, Progress, and Strategic Alignment

The Resolution project, with its estimated 1.7 billion metric tons of copper reserves, is a linchpin of U.S. reshoring ambitions. Here's why it matters:
- Scale: At full production, Resolution could supply 7% of U.S. copper demand, a critical contribution to reducing reliance on imports.
- Permitting Progress: The U.S. Forest Service (USFS) republished the Final Environmental Impact Statement (FEIS) and draft Record of Decision (ROD) in June 2025, advancing the congressionally mandated land swap under the 2014 Southeast Arizona Land Exchange and Conservation Act. The land transfer, pending a 60-day waiting period, is now slated for completion by August 19, 2025.
- Legal Wins: The Supreme Court's refusal to hear Apache Stronghold's appeal—a challenge rooted in the sacred Oak Flat site—removed a major hurdle. While tribal consultations and lawsuits (e.g., San Carlos Apache Tribe v. United States) linger, the project's legal trajectory is now favorable.

Risks and Realities: Navigating the Path to Production

Despite progress, risks remain:
1. Legal Lingering: Ongoing tribal disputes and environmental concerns—such as water usage (20,000 acre-feet annually) and tailings management—could delay permits or trigger costly adjustments.
2. Timing: Even if approved, full-scale production is years away. The mine's development timeline, combined with global copper price volatility, introduces execution risk.
3. Political Uncertainty: While the Trump administration's “America First” policies underpin the tariffs, regulatory support could shift with the 2024 election.

Why Investors Should Bet on Rio Tinto

Resolution's success hinges on its alignment with two unstoppable trends: tariff-driven reshoring and the critical mineral boom. Key arguments for Rio Tinto as an investment play:
- Strategic Monopoly: With Resolution, Rio Tinto becomes a near-term leader in U.S. copper production, a position no other miner can claim.
- Valuation: At current prices, RIO trades at a discount to peers like Freeport-McMoRan (FCX), despite Resolution's potential to add 20% or more to its copper reserves.
- Long-Term Tailwinds: The Biden administration's conditional support for tribal consultations and environmental compliance suggests regulatory hurdles are being managed, not halted.

Conclusion: A High-Reward, High-Risk Opportunity

Resolution Copper is a “build it and they will come” play for investors willing to tolerate execution risk. The mine's scale, permitting momentum, and alignment with U.S. strategic priorities make it a rare leveraged position on domestic copper self-sufficiency. While legal and environmental uncertainties linger, the August 1 tariff deadline creates a near-term catalyst for Rio Tinto's stock.

For a long-term portfolio focused on critical minerals, RIO offers asymmetric upside. Investors should pair this with a cautious stance on industries vulnerable to copper price spikes (e.g., EV manufacturers) and monitor Resolution's permitting timeline closely. The road to production is bumpy, but the payoff for U.S. copper independence—and Rio Tinto's bottom line—could be historic.

Recommendation: Consider a gradual position in RIO for investors with a 3–5 year horizon, hedged against near-term copper price volatility. Monitor the August 1 tariff implementation and tribal consultation outcomes as key inflection points.