Rio Tinto Group became the latest mining major to post a slide in annual profit as the industry grapples with weaker demand from its top customer China.
The world’s biggest iron ore miner posted an underlying profit of $10.9 billion, 7.6% lower than a year earlier. It will pay a final dividend of $2.25 per share compared with $2.58 in the year before.
Rio’s results follow BHP Group and Glencore Plc, which both reported weaker earnings than last year. Iron ore has been under sustained pressure from China’s property crisis, while coal — a key Glencore earner — has slumped in the face of a supply glut.
Still, Rio proved more resilient than its rivals, after it benefited from strong growth in its copper business that helped offset weakening iron ore prices.
Nearly all of Rio’s closest peers face near-term declines in copper output, a commodity favored by many investors, while Rio’s production is growing thanks to a large expansion project in Mongolia. The company has a series of other growth projects coming on stream, including lithium in Argentina and a giant iron ore project in Guinea.
While Rio has emphasized its internal growth prospects, the company also held discussions with Glencore about a possible combination, Bloomberg reported last month.
Still, iron ore remains Rio’s biggest profit driver. Slumping prices meant that Rio’s earnings from the steelmaking ingredient fell 19% from 2023 even though production remained flat. Earnings from copper jumped 75%.
The iron ore market continues to struggle in the face of macroeconomic uncertainty in China, despite attempts by Beijing to stabilize its debt-ridden property sector.
The top metals consumer is also starting to feel the sting of tariffs leveled by the US. Just two weeks ago, President Donald Trump signed executive orders imposing tariffs of 10% across the board on all imports from China.
Rio maintained its dividend payout ratio at 60%, despite spending heavily on growth.
Thomas Biesheuvel, Bloomberg News
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