Rio Tinto first-half earnings down 29% on weak iron ore prices

Miner Rio Tinto RIO.AX reported a 29% drop in first-half profit on Wednesday, hurt by weaker iron ore prices due to cooling demand from top consumer China, higher costs and labour shortages.

Iron ore prices have come under increased pressure in recent months due to persistent demand worries from top steel producer China, with the country’s zero-COVID policy curtailing economic activity and weighing on ferrous markets.

Mining companies around the world have also been struggling due to a pandemic-related shortage of skilled workers and surging inflation, at a time when iron ore prices have come off their 2021 highs and are expected to remain subdued.

“The market environment has become more challenging at the end of the period,” Rio Tinto Chief Executive Jakob Stausholm said.

The company, one of the world’s top iron ore producers, posted an underlying profit of $8.63 billion for the six months ended June 30, compared with a record $12.17 billion a year earlier and a company-compiled estimate of $8.37 billion.

Rio Tinto declared a total interim dividend of $2.67 per share, compared with $5.61 per share a year earlier.
Source: Reuters (Reporting by Sameer Manekar and Harish Sridharan in Bengaluru; Editing by Shounak Dasgupta)