Rio Tinto has posted a record annual profit and dividend as the company flourished during the 2021 iron ore boom.
The major miner reported a net profit after tax (NPAT) of $US21.09 billion ($29.24 billion) for the year and a $US16.8 billion full-year dividend.
This equated to $US10.40 per share in total dividend for 2021, which comprises a special dividend of $US0.62 per share and final dividend of $US4.17 per share, both to be paid out in April.
Rio Tinto accrued $US25.3 billion from operating activities in 2021 (60 per cent increase from 2020). This was driven by the high iron ore prices experienced during the first six months of the year.
This contributed to an 88 per cent higher free cash flow of $US17.7 billion year-on-year. As part of this, Rio Tinto increased its capital expenditure by 19 per cent ($US7.4 billion).
Rio Tinto’s record financial results came despite the company experiencing a 3 per cent decrease in Pilbara iron ore production and 4 per cent dip in Pilbara iron ore shipments for 2021.
The company flagged above average rainfall in the first half of the year, delays in growth and brownfield mine replacement tie-in projects, plus cultural heritage management as the reasons for the falls in production.
Rio Tinto chief executive Jakob Stausholm said buoyant market conditions played a key role in the company’s annual success.
“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 $US17.7 billion and underlying earnings of $US21.4 billion,” he said.
“With the launch of our new strategy, we have set a new direction for Rio Tinto to thrive in a decarbonising world. We have a portfolio that is well positioned and are targeting disciplined investment in commodities that will see strong demand in the coming decades.”
In mid-February, Rio Tinto and the Yinhawangka Aboriginal Corporation (YAC) agreed on a new co-designed management plan to ensure the protection of significant social and cultural heritage values.
The management plan relates to the proposed development of the Western Range iron ore project in Western Australia.
Rio Tinto continues work to improve its approach to social and cultural heritage management with Traditional Owners in the Pilbara and is engaging with other Traditional Owner groups to develop similar plans.