Rio Tinto announces first half underlying earnings of $5.2 billion
Solid financial results driven by record operational performance of iron ore division:
- Underlying earnings of $5.2 billion down 34 per cent largely due to lower prices. Net earnings of $5.9 billion down 22 per cent.
- Underlying EBITDA of $10.1 billion and cash flows from operations of $7.8 billion.
- Recognition within net earnings of a $1.0 billion deferred tax asset following the introduction of the Minerals Resource Rent Tax (MRRT) in Australia.
- Pilbara iron ore network in Western Australia now operating at increased capacity of 230 million tonnes per annum (Mt/a) following completion of second low capital debottlenecking project on time and on budget
- Shipped first cargo of premium hard coking coal from Benga mine in Mozambique.
Consistent delivery against clearly defined growth programme:
- Capital expenditure of $7.6 billion in 2012 first half. Expectations for capital expenditure for full year 2012 remain at $16 billion (Rio Tinto attributable share: $13.6 billion).
- Phase one Pilbara iron ore expansion to 283 Mt/a on track for completion by end of 2013. Second phase expansion to 353 Mt/a to be operational by the first half of 2015.
- Development of the Oyu Tolgoi copper-gold project in Mongolia remains on schedule for first commercial production in the first half of 2013.
- Completed agreement with Chalco to develop and operate Simandou, with first commercial production by mid-2015.
Further steps taken to shape the portfolio:
- Attained majority ownership and full management control of Turquoise Hill (formerly Ivanhoe).
- Announced doubling of stake in Richards Bay Minerals in South Africa to 74 per cent: transaction expected to complete in second half of 2012.
- Strategic review of diamond business including exploring a range of options for potential divestment.
Interim dividend of 72.5 US cents declared, 34 per cent higher than 2011, in line with the Group's dividend policy and previous guidance.
$7 billion share buy-back programme completed at end of the first quarter.
