Serbia revoked the mining company's lithium exploration licenses
Rio Tinto PLC (NYSE:RIO) stock is down 2.6% to trade at $74.18 at last check, after Serbia revoked the mining company’s lithium exploration licenses amid environmental protests. This is a major setback for Rio Tinto, as it hopes to become one of the world's 10 biggest lithium producers, a key ingredient for batteries and crucial to the electric vehicle (EV) boom. The decision comes days after tennis star Novak Djokovic was deported from Australia due to Covid-19 entry rules, heightening tensions between Serbia and Australia.
Year-to-date, RIO is still up 10.8% despite today's dip. On track for its second day of losses, its possible that the stock's rally has lost steam at the $78 level, the site of a mid-August bear gap. The equity has also dipped below its recently supportive 10-day moving average, which has ushered RI higher for the last month.
There is plenty of room for upgrades that could give the stock a boost, should 2022 gains hold. Of the five analysts in coverage, four carry a "hold" or worse rating. Plus, the 12-month consensus price target of $74.72 is in line with current levels.
It is also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at an 89 out of 100. This suggests Rio Tinto stock has exceeded options traders' volatility expectations during the past year.