Rio Tinto reports 28% drop in H1 earnings

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Image credit: www.riotinto.com

Rio Tinto has released its 2022 half year results, which showed that the company generated $10.5 billion net cash from operating activities – 23% less than than in the 2021 first half.

The company reported $8.9 billion of net earnings, 28% lower than 2021 first half, which Rio attributed to “the movement in commodity prices, the impact of higher energy prices on our operations and higher rates of inflation on our operating costs and closure liabilities.

Despite posting lower earnings compared to the 2021 first half, Rio Tinto CEO Jakob Stausholm said the company was able to achieve a steady improvement in operating performance and some notable advances in its growth agenda.

“Market conditions were good, albeit below last year’s record levels. We delivered largely flat production and solid financial results, with underlying EBITDA of $15.6 billion, free cash flow of $7.1 billion and underlying earnings of $8.6 billion, after taxes and government royalties of $4.8 billion,” Mr Stausholm noted.

Adertisement

“As a result, we are paying our second highest ever interim dividend of $4.3 billion, a 50% payout, in line with our policy. The market environment has become more challenging at the end of the period.”

The first half of 2022 marked the delivery of first ore from Gudai-Darri, Rio’s first greenfield iron ore mine in the Pilbara in more than a decade, which is expected it to reach its 43 million tonne per year capacity in 2023.

The company also fired the first and second drawbells from the Hugo North copper-gold underground mine at Oyu Tolgoi in Mongolia, with sustainable production expected to be achieved in the first half of 2023.

Following completion of the acquisition of the Rincon lithium project in Argentina, the company also has approved $190 million to develop a small starter battery-grade lithium carbonate plant with a capacity of 3,000 tonnes per year and first saleable production in 2024.

According to Rio, the approval also includes early works to support a full-scale operation, including power line and associated substations, construction camp and airstrip.

“The progress we are making will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society in the drive to netzero carbon emissions,” Mr Stausholm concluded.

Image credit: www.riotinto.com