Rio Tinto sets record US$17b dividend as higher iron ore prices propel profit

[BENGALURU] Rio Tinto reported on Wednesday (Feb 23) its best annual profit and a record full-year dividend of US$16.8 billion, boosted by higher iron ore prices and strong demand from top consumer China.

The world's biggest iron ore producer posted underlying earnings of US$21.38 billion for the year ended Dec 31, up 72 per cent from a year earlier. Analysts had expected underlying earnings of US$21.63 billion, according to Visible Alpha.

The jump in earnings came despite tight labour market conditions due to pandemic-related restrictions and its impact on the ramping up of the company's Pilbara operations in Western Australia.

"The recovery of the global economy, driven by industrial production, resulted in significant price strength for our major commodities, which we were able to capture, achieving record financial results...," Rio Tinto chief executive Jakob Stausholm said in a statement.

Rio Tinto declared a final special dividend of US$0.62 per share and a final dividend of US$4.17 per share, higher than the US$3.09 per share final dividend a year earlier, bringing the total dividend for 2021 to a record US$10.40 per share.

The company's shares closed 1.2 per cent higher on the Australia Stock Exchange ahead of the results.

Labour shortages induced by Covid-19 restrictions have hit Australian miners, with Rio previously forecasting weaker-than-expected iron ore shipments for 2022.

The miner on Wednesday warned of Pilbara iron ore unit cash costs for 2022 rising to between US$19.5 and US$21.0 per tonne from last year's US$18.6 per tonne. REUTERS