Rio Tinto has posted a strong financial performance for the first half of 2024 as the major miner prepares to ramp up growth investments.
The company posted an underlying EBITDA of $12.1 billion with net cash generated from operating activities of $7.1 billion.
Rio chief executive Jakob Stausholm said the company’s margins have been due to disciplined investments.
“Rio Tinto is both consistently very profitable and growing,” he said. “This is being driven by the disciplined investments we are making to strengthen our operations and progress major projects for profitable organic growth.”
The company’s copper equivalent production is on track to grow by around two per cent this year, with an ambition for “around three per cent of compound annual growth from 2024 to 2028 from existing operations and projects”.
The key project fuelling this growth is the Oyu Tolgoi underground copper mine in Mongolia, which is tipped to become the world’s fourth largest copper deposit.
While open pit mining at Oyu Tolgoi commenced in 2011, underground production began in March 2023, making it an integrated surface and underground copper business for the first time.
The development of the Simandou iron ore project in Guinea and the Rincon lithium project in Argentina are also significant growth avenues for Rio.
“We have considerable growth in cash flow from the ramp-up of the underground copper mine at Oyu Tolgoi, and more value to come as our Simandou investment and Rincon lithium project proceed at pace,” Stausholm said.
The Rincon lithium project is located in the heart of the ‘lithium triangle’ in Argentina and is set to be a valuable source for lithium for the global energy transition.
In addition to these expansion efforts, Rio Tinto’s aluminium business and Pilbara iron ore operations are experiencing consistent production levels, also contributing to the company’s strong financial results.
Stausholm highlighted the role of innovation and partnerships in overcoming challenges, such as “the renewable power solutions announced for Boyne and NZAS (New Zealand’s aluminium smelter)”.
With a robust balance sheet and a commitment to maintaining a 50 per cent interim payout, as evidenced by the $2.9 billion ordinary dividend, Rio Tinto continues to invest in shaping a stronger future.
“Our strong balance sheet enables us to continue to maintain our practice of a 50 per cent interim payout with a $2.9 billion ordinary dividend as we continue to invest with discipline to shape Rio Tinto into an even stronger company,” Stausholm said.