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Leading mining company Rio Tinto has announced 2013 underlying earnings of $4.2 billion, down 18 per cent. The company argues that the result reflects lower average market prices and a higher effective tax rate, partly offset by record iron ore shipments and cost savings momentum.
Rio Tinto’s net earnings of $1.7 billion include non-cash exchange losses of $1.9 billion and a $0.3billion write-off of waste stripping costs and damaged equipment at Kennecott Utah Copper following the pit wall slide at Bingham Canyon in April.
The mining giant also annoucned a 15 per cent increase in interim dividend to 83.5 cents per share.
Chairman Jan du Plessis said that the “business has demonstrated considerable resilience against a backdrop of continuing market volatility. Cash flows from operations were strong, driven by our cost savings programmes but lower prices and a higher tax rate led to a reduction in underlying earnings to $4.2 billion in the first half of 2013.
Mr du Plessis further argued that Rip Tinto’s “strategy to invest in and operate large,long-life, low-cost, expandable operations remains unchanged. Sam and his team are seeking to simplify the portfolio through the divestment of non-core assets but only where we can realise value for shareholders. Our interim dividend increased by 15 per cent, in line with our policy and reflecting the increase in our 2012 full year dividend.
