Better Buy: The Metals Company or Rio Tinto?

When it comes to metals mining companies, Australian stalwart Rio Tinto (RIO 0.58%) and Canadian start-up The Metals Company (TMC 1.74%) couldn’t be more different. Rio Tinto was founded in 1873, while The Metals Company didn’t go public until 2021. Rio Tinto has a $114 billion market cap, while The Metals Company’s market cap is just $2.5 billion.

But there’s one quality these two metals companies have in common: Both are trading significantly off their highs. Rio Tinto is trading at a 25% discount to its pandemic-era high from 2021, and The Metals Company’s stock has plunged 30% from its 2025 high, which it just set in October:

Which of these metals companies is the best pick for investors interested in “buying the dip”? There’s one clear winner, and it may not be the one you’re expecting.

Big vs. small

Rio Tinto is one of the oldest and largest mining companies in the world, with a global network of terrestrial mines. Rio Tinto primarily mines commodity metals like iron ore, aluminum, copper, and lithium, but it also mines other minerals like salt and the white pigment titanium dioxide.

Meanwhile, The Metals Company is laser-focused on a single type of ore, called polymetallic nodules, which are found lying around on the bottom of the Pacific Ocean in international waters. These potato-sized rocks are rich in the commodity metals manganese, cobalt, nickel, and copper. The Metals Company has applied to the International Seabed Authority (ISA) for permission to start extracting them (which really just means picking them up at scale: they’re not attached to anything). It hopes to then build processing facilities to extract and refine the ore and sell it.

Why their share prices dropped

Each company experienced a brief surge in stock price before its big decline.

Rio Tinto’s 2021 surge was driven by unprecedented global demand for iron ore. Spot prices for iron ore — which are responsible for about 80% of Rio Tinto’s earnings — skyrocketed from about $90/metric ton to $214/metric ton in mid-2021 during the pandemic lockdowns. When the Chinese government instituted new policies that reduced demand, the spot price dropped and so did Rio Tinto’s stock price.

The Metals Company’s stock, on the other hand, spiked just last month after China announced it would tighten export controls on rare-earth metals. Although none of the metals in polymetallic nodules are rare-earth minerals, investors may have been hopeful that any metal supply disruptions would encourage the ISA to greenlight additional sources of other critical metals. When the White House started expressing optimism about striking a deal to avoid rare-earth export controls, The Metals Company’s shares began to decline again.

Ironically, Rio Tinto’s share price wasn’t affected by the rare-earth metals news, even though Rio Tinto actually does mine a rare-earth metal — scandium — in Canada and Australia.

Which is the better buy?

The U.S. and China have struck a deal to keep the global rare-earth metals supply chain intact (at least, for now), so there’s little reason to think that The Metals Company’s stock will see any further short-term benefits. But even after its recent share price decline, The Metals Company’s shares are still up more than 425% this year. However, it doesn’t even expect to begin commercial operations until Q4 2027 at the earliest, and management estimates it won’t fully scale until 2043. That’s a long time to wait for an investment to pay off.

Meanwhile, Rio Tinto is an investment that’s already paying dividends — literally. Its dividend policy is a bit unusual: It pays one small mid-year dividend and one large end-of-year dividend, both of which fluctuate depending on metal spot prices. When iron ore prices got so high during the pandemic, the company’s dividend yield soared to well over 10% as management shared the wealth with company stockholders.

Even when iron ore spot prices are low, Rio Tinto’s dividend tends to be generous. Earlier this year, those prices hit a post-pandemic low of about $92/metric ton, but Rio Tinto’s dividend yield remained well over 5%. Spot prices have since begin to rebound, to more than $100/metric ton, which is very good for the company. Given Rio Tinto’s long history and leading position in this industry, plus its shareholder-friendly dividend policies, it looks like a much better buy right now than the speculative, pre-commercial The Metals Company.