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Rio Tinto has recorded its weakest first-half profit for five years after a slump in the iron ore price and cyclones in Western Australia hit its biggest source of income.
The Anglo-Australian miner said results for the six months to June were “very resilient” given a 13 per cent drop in the average iron ore price during the period. The decline hit group earnings before interest, tax, depreciation and amortisation by about $2bn, chief financial officer Peter Cunningham told the Financial Times.
Rio’s performance in copper, a key growth metal for the mining industry, and aluminium made a key contribution.
“We’re getting so much more contribution from aluminium and copper that you can see we’re less dependent on the iron ore price,” said outgoing chief executive Jakob Stausholm.
The results were the last to be presented by Stausholm, who is being replaced next month by Simon Trott, head of iron ore. Trott is expected to drive a group restructuring.
Stausholm said the company had “solid foundations in place” having invested in growth markets including lithium during his tenure.
The outgoing chief was appointed five years ago after Rio destroyed a sacred indigenous site at Juukan Gorge that led to the exit of its former chair and chief executive.
Stausholm said on Wednesday it was “a horrible event” but had led to a renewed emphasis on improving the culture at the mining company. “We were on our knees and that makes you really humble,” he said.
Rio’s underlying ebitda dropped 5 per cent to $11.5bn in the six months, while underlying earnings fell 16 per cent to $4.8bn — the lowest level since 2020.
Rio has proposed a dividend of $1.48 a share, down from $1.77 a year ago and below analyst expectations.
Stausholm said iron ore remained the “crown jewel” of its operations but that the company would seek opportunities to save costs. “The magic words at Rio Tinto are continuous improvement,” he said.
US President Donald Trump’s tariffs on copper, aluminium and steel have created a turbulent environment for miners.
Stausholm said tariffs had become a “huge topic” for the industry but that Rio had been able to navigate their impact on its aluminium production in Canada, while it should benefit from tariffs on copper given that it had some production in the US.
The economics of Rio’s US copper smelter was “much improved with tariffs”, said Stausholm, adding that the US had an opportunity to make domestic copper smelting “more profitable”.
As well as diversifying into copper and aluminium, Rio is making a push into lithium, and will pay up to $900mn for a near-50 per cent stake in Chile’s Maricunga lithium project.
Stausholm said Rio had seen “very strong demand” for the metal during the first half of the year, with “huge demand” coming from the batteries used for energy storage as well as demand from the transition to electric vehicles. “All the fundamentals are telling us” that Rio’s push into the metal was “rightly timed”, he said.
His comments come as Australia’s lithium players, including Pilbara Minerals and Gina Rinehart-backed Liontown Resources, pointed to signs of a market recovery after a collapse in prices over the past year.
Meanwhile, trading house Glencore reported a 26 per cent slide in copper production during the first half of the year, and said it aimed to make cost savings of about $1bn by the end of 2026. Glencore will report earnings next week.