Anglo-Australian miner Rio Tinto reported a 72% rise in earnings, helped by higher iron ore prices and strong demand from China, allowing the company to declare a record dividend payout for the year.
The jump in earnings came despite tight labour market conditions due to coronavirus pandemic-related restrictions and impact to the ramping up of its Pilbara projects in Western Australia.
The world’s biggest iron ore producer posted underlying earnings of $21.38 billion for the year ended December 31, compared with $12.45 billion a year earlier.
Analysts had expected underlying earnings of $21.63 billion, according to Visible Alpha.
Rio Tinto announced a record $7.7 billion half-year dividend. The company’s biggest shareholder is Chinese state-owned aluminium producer Chinalco, which will receive more than $2.5 billion.
The miner declared a final special dividend of 62 cents per share and a final dividend of $4.17 per share, higher than the $3.09 per share final dividend a year earlier.
The results reflect huge demand for raw materials since the onset of the pandemic.
BHP, the world’s biggest miner, recently declared a record $7.6 billion half-year dividend, while Glencore said it would pay out $4 billion to shareholders and Antofagasta also set a record $1.4 billion dividend on Tuesday.
The results will give satisfaction to Jakob Stausholm, Rio Tinto’s recently appointed chief executive, tasked with improving the miner’s reputation after a spate of scandals involving racism, sexual harassment and destruction of indigenous habitat.
Stausholm has put Rio Tinto’s biggest project — the huge Oyu Tolgoi copper mine in the Gobi desert — back on track after agreeing to write off $2.4 billion in debt owed by the Mongolian government.
However, Rio Tinto was named among mining companies seeking to expand to protected indigenous lands in the Amazon rainforest in a report released on Tuesday.
Nine mining giants including Rio Tinto have filed applications to mine on indigenous reservations in Brazil even though that is illegal, said the report by the environmental group Amazon Watch and the Association of Brazil’s Indigenous Peoples.
The report found the mining firms, including Glencore, AngloGold Ashanti, Vale and Anglo American, received $54.1 billion in financing from investors over the past five years for their Brazilian operations.
It urged banks and financial firms backing such companies to pull out of them, saying many also had a history of human rights violations and environmental destruction.
- George Russell, with Reuters