Rio Tinto allocates $1b annual spend for mine closures, including Gove refinery rehabilitation
LONDON: Rio Tinto announced first-half net earnings of $4.5 billion attributable to shareholders on Wednesday, down from $5.8 billion a year earlier, as lower iron ore prices offset gains from copper and aluminum operations. Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) held steady at $11.5 billion, reflecting cost discipline and record bauxite output.
Chief Executive Jakob Stausholm credited the miner’s “increasingly diversified portfolio” for resilient results despite a 13% drop in iron ore prices and disruptions from four cyclones in Australia’s Pilbara region. Copper-equivalent production rose 6% year-over-year, driven by Oyu Tolgoi’s underground ramp-up in Mongolia and higher grades at Chile’s Escondida.
Key Financial Drivers:
- Prices: Iron ore declines cost $800 million, partly offset by stronger copper, aluminum, and gold prices.
- Volumes: Shipment growth added $700 million, with copper volumes surging 21% and bauxite up 9%.
- Costs: Unit cash costs remained stable; aluminum efficiencies saved $200 million.
- Taxes: Higher effective tax rate (33% vs. 30%) due to profits from high-tax jurisdictions.
Production Guidance:
- Iron Ore: Pilbara shipments at lower end of guidance after Q1 cyclones.
- Copper: Output expected at higher end of range; unit costs lowered to 110–130¢/lb.
- Bauxite: Production at higher end on record Amrun performance.
- Lithium: Arcadium acquisition closed early; new Chile deals secured.
Stausholm confirmed a $2.4 billion interim dividend (50% payout) and maintained 2025 capital expenditure at $11 billion. The company accelerated first shipments from Guinea’s Simandou iron ore project to November 2025.
Market Outlook:
- China: Steel exports rose 9% despite property slump; copper demand fueled by EVs.
- Copper: Supply crunch pushed processing fees to record lows.
- Lithium: Prices fell 34% due to oversupply, though EV sales grew 29%.
Rio Tinto named Simon Trott as incoming CEO, effective Aug. 25. Closure costs for legacy sites totaled $1 billion in H1, with provisions at $16.5 billion.