Mining giant Rio Tinto sees profits slip 20% but eyes US$2.5 bil dividend

The Rio Tinto alumina refinery in Gove, also known as Nhulunbuy, 650km east of Darwin, Australia. (Reuters pic)

SYDNEY: Rio Tinto reported a 20% drop in first-half net profits Wednesday, as the coronavirus pandemic tempered global mineral prices.

The mining giant’s US$3.3 billion net profits, down from US$4.1 billion the year before, were largely in line with estimates, despite a 12% drop in cash generated from operations — in part on weaker aluminium and copper prices.

“We have been agile and adapted our way of working, to deliver another resilient performance while navigating the new and ongoing challenges of dealing with Covid-19,” chief executive Jean-Sebastien Jacques told investors.

“We have declared an interim dividend of US$2.5 billion, equivalent to US$1.55 per share, and have reconfirmed our 2020 production guidance across all commodities,” he added.

The company reported a 3% increase in iron ore shipments versus the first half of 2019 “driven by strong demand from China and constraints in seaborne supply”.

The otherwise solid period was marred by the company admitting it blew up a 46,000-year-old Aboriginal heritage site to expand an iron ore mine.

The ancient rock shelters were in the Juukan Gorge in Western Australia’s Pilbara region.

“We remain committed to our relationship with communities, following the Juukan Gorge events,” Jacques said, promising to present a submission to a government inquiry by the end of the month.

” A board-led review of our heritage management processes is underway,” he said.