On Wednesday, Rio Tinto reported a 12% decline in underlying earnings in line with forecasts, but paid a final dividend better than expected as inflationary pressures began to ease. The company also announced that it is seeking approval from the Government of Serbia to launch the Jadar project.
Rio Tinto stated that its underlying earnings amounted to $11.8 billion in 2023, down from $13.4 billion the previous year and in line with expectations, primarily due to lower aluminum prices, as reported by Reuters.
Rio Tinto declared a final dividend of 258 cents per share for the previous year, compared to 225 cents per share in 2022 and exceeding the expected 247 cents. The world’s largest iron ore producer announced that it expects an increase in production costs in the current year, although the worst of the inflationary pressures has likely passed.
The company assessed that it remains in a very strong financial position and can afford to continue its growth agenda. In the iron ore division, which contributed about 80% to Rio Tinto’s profit, underlying earnings increased by six percent, surpassing the two percent rise in iron ore prices.
The company anticipates that production costs will rise from $21.50 per metric ton to $21.75 to $23.50, reflecting the delayed effects of inflation.
The Chief Executive Officer of the company, Jakob Stausholm, has maintained the earlier stance that the company is open to small acquisitions and lithium production, despite the drop in lithium prices that has disrupted the company’s estimates. Rio Tinto is currently focused on developing its Argentine Rincon lithium project and seeking government approval for the development of the Jadar mine in Serbia, Stausholm said.
“I have seen that lithium company prices have fallen, but they are still at a high level, so it’s not something I am currently concerned about,” stated the CEO of Rio Tinto.
