Diversified mining major Rio Tinto reported a 22% decline in first-half profit to $4.5-billion as lower iron-ore prices and cyclone disruptions in Australia weighed on performance, despite higher output in copper and aluminium.

The world’s second-largest miner said underlying earnings dropped 16% to $4.8-billion for the six months ended June 30, with underlying earnings before interest, tax, depreciation and amortisation (Ebitda) falling 5% to $11.5-billion. Operating cash flow held steady at $6.9-billion, while free cash flow slumped 31% to $2-billion, reflecting higher capital expenditure.

“We are delivering very resilient financial results with an improving operational performance helped by our increasingly diversified portfolio,” said outgoing CEO Jakob Stausholm.

“Underlying Ebitda of $11.5-billion and operating cash flow of $6.9-billion, despite a 13% lower iron-ore price, demonstrate the growing contribution from our aluminium and copper businesses and our Pilbara operations' strong recovery from the four cyclones in the first quarter.”

Net debt more than doubled to $14.6-billion from $5.5-billion in December, largely due to the $6.7-billion acquisition of Arcadium Lithium, which closed ahead of schedule in March.

Rio declared an interim dividend of $2.4-billion, or 148c a share, maintaining its policy of paying out 50% of underlying earnings.“Our strong cash flow enables us to maintain our practice of a 50% interim payout... as we continue our disciplined investment in profitable growth while retaining a strong balance sheet,” said Stausholm.

Group production on a copper-equivalent basis rose 6% year-on-year. Copper output at Oyu Tolgoi jumped 54%, while aluminium production benefited from strong performance at Amrun and Gove.

In the Pilbara, iron-ore production rebounded, with the second-quarter marking the strongest quarterly output since 2018.

Key project milestones included the on-time opening of the Western Range iron-ore mine in June, and start of construction at Hope Downs 2 and Brockman Syncline 1 after securing necessary approvals. First shipment from the Simandou iron-ore project in Guinea is targeted for around November 2025.

DECARBONISATION AND ESG
The company spent $72-million in capital and $181-million in operational expenditure on decarbonisation efforts, aiming to halve Scope 1 and 2 emissions by 2030 compared to a 2018 baseline. First-half emissions were 15.6-million tonnes of carbon-dioxide equivalent, a 14% reduction.

Rio also signed a co-management agreement with the Puutu Kunti Kurrama and Pinikura people, and implemented a co-designed cultural and heritage management plan with Yinhawangka Traditional Owners at the Western Range project.

“We remain on track to deliver strong mid-term production growth, with solid foundations in place and a diverse pipeline of options for the future,” said Stausholm.