The pandemic has overshadowed higher iron ore prices, weighing on Rio's first half profit. Image by Alan Porritt/AAP PHOTOS

iron and steel

Rio Tinto first-half profit drops 4 pct

2020-07-29 18:17:54

Rio Tinto has reported better-than-expected first-half profit, boosted by firm prices for iron ore and higher output as Chinese demand for the steel-making ingredient recovered from a coronavirus hit.

Iron ore prices have remained resilient this year on the back of China’s infrastructure development push and concerns over a supply shortfall from Brazil, helping miners like Rio weather through disruptions in mining other commodities.

Underlying earnings from iron ore, which typically accounts for about 80 per cent of Rio’s earnings, gained 1 per cent to $US4.56 billion ($A6.35 billion) in the half-year, and shipments rose three per cent.

Total underlying earnings for the six months ended June 30 fell to $US4.75 billion from $US4.93 billion a year earlier, but handily beat a consensus of $US4.36 billion from 16 analysts compiled by Vuma.

Rio said it took a $US1 billion impairment charge for the period, largely related to four of its aluminium smelters and its Diavik diamond mine in Canada.

The world’s largest iron ore miner declared an interim dividend of $US1.55 per share, up from $US1.51 a year ago.

But given the strength of the Australian dollar against the greenback, the dividend will be lower for most Australian shareholders.

Rio Tinto Limited will pay Australian shareholders $A2.1647 per share, down from $2.1908 a year ago.

, from $2.1646 last year, and stuck to its 2020 production forecast for all its commodities.