Rio Tinto has announced record financial results in its full-year financial report for 2021.
The Anglo-Australian mining company reported an 88% free cash flow increase to $17.7bn, following a 42% leap in revenues.
Rio Tinto rewarded investors with a record $16.8 billion in full-year dividends, equating to 1,040 US cents per share, alongside a special dividend of 247 US cents per share.
The dividends amounted to a 79% payout for shareholders in the company.
The company cited global economic recovery post-Covid-19 for its record financial results, consequently helping it retain approximately 80% of the benefit from rising prices.
Rio Tinto cited the Platts index strength with a 62% in iron fines, alongside the Higher London Metal Exchange (LME) prices for acting as a driving factor behind the strong price boost for its copper and aluminium profitability.
“These results are all about commodity prices and the cash flow that comes from low production costs,” said Steve Clayton, Fund Manager at HL Select.
“Iron Ore revenues drive the majority of Rio’s revenues and with ore prices strong and Rio’s operating costs amongst the lowest in the industry, cash generation was always going to be strong in 2021.”
Rio Tinto Portfolio
The metals producer further highlighted recent developments in its portfolio, including the opening of underground gold and copper mining operations in Mongolia after the Mongolian government approved the Oyu Tolgoi agreement.
The deal has allowed the company to start operations in the country, with first sightings of sustainable production estimated for the first half of 2023.
The company also confirmed its agreement to acquire the Rincon lithium project based in Argentina.
“Our people have continued to safely run our world-class assets and are working hard to improve our operational performance, despite challenging operating conditions from prolonged COVID-19 disruptions,” said Rio Tinto Chief Executive Jakob Stausholm.
“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 with free cash flow of $17.7 billion and underlying earnings of $21.4 billion, after taxes and government royalties of $13.0 billion.”