Rio Tinto’s yearly profit and revenue were down in 2023 and the company has warned of higher costs at its Pilbara iron ore operation in 2024.
Underlying earnings before tax, interest and depreciation (EBITDA) was down 9% to $23.8bn, while sales revenue dropped to $54bn, down from $55.5bn in 2022. Underlying profit fell by 12%.
China’s weaker-than-expected post-pandemic recovery has put downward pressure on industrial commodities.
Jakob Stausholm, chief executive of Rio Tinto, said: “We are making clear progress as we shape Rio Tinto into a stronger and even more reliable company. By focusing on our four objectives, we are building a portfolio that is fit for the future – including our Oyu Tolgoi underground copper mine in Mongolia and the Simandou iron ore project in Guinea.”
He added that the company raised overall copper production by more than 3% in 2023.
Rio Tinto’s total dividend for the year was 12% lower at 435 US cents ($4.35) per share, down from 492 cents in 2022. Nevertheless, the final dividend was 258 per share, a 15% rise from 225 cents.
“We will continue paying attractive dividends and investing in the long-term strength of our business as we grow in the materials needed for a decarbonising world,” Stausholm said.
The Anglo-Australian company noted that it increased production at its Pilbara operation by five million tonnes in 2023, and it expects to deliver another five million tonne uplift in 2024. Looking at costs, Rio is advising for Pilbara cash costs per wet metric tonne of $21.75–23.5, up from $21.5 in 2023.
Rio said: “2024 guidance for Pilbara unit cash costs reflects the increased work effort in the mines and persistent labour and parts inflation in Western Australia.”
However, it expects costs to eventually fall. It added: “Our Copper C1 unit costs are expected to decrease in 2024, primarily driven by higher volumes at Oyu Tolgoi as the underground continues to ramp up, and at Kennecott, where refined copper volumes are expected to increase following the planned smelter rebuild in 2023.”
In Sydney, Rio Tinto shares fell 1.8% to A$125.80 ($82.44) on Wednesday.
