Rio Tinto Is Digging Mostly Into Its Pocket
The mining giant announced another bumper cash payout while producing less iron ore, copper and aluminum. This doesn’t look sustainable.
Burrowing for cash.
Photographer: Ian Waldie/Bloomberg
A combination of hefty dividends and contracting output is turning the world’s second-largest miner into the poster child for a $1.5 trillion industry’s growth quandary.
Rio Tinto Group announced a record $3.7 billion final dividend Wednesday, adding to $11.9 billion of cash returns already paid in 2019. Yet it produced less iron ore, copper and aluminum, leaving market prices to lift underlying earnings by 18%. Rio’s Pilbara operations stumbled early in the year. Its Mongolian copper mine, a key source of future production and the basis of a greener portfolio, is now not only sorely overdue and over-budget, but also tangled in international tax arbitration.