REG - Rio Tinto - Final Results
19/02/2025 18:00
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RNS Number : 7486X Rio Tinto PLC 19 February 2025
19 February 2025
Strong operating performance underpins financial results
• Resilient financials with underlying EBITDA of $23.3 billion,
despite 11% lower iron ore price*.
• Higher net cash generated from operating activities of $15.6
billion, driven by portfolio mix and effective working capital management.
• Profit after tax attributable to owners of Rio Tinto (referred to
as "net earnings" throughout this release) of $11.6 billion.
• Full year ordinary dividend of $6.5 billion, a 60% payout:
nine-year track record at top end of payout range
Year ended 31 December 2024 2023 Change
Net cash generated from operating activities (US$ millions) 15,599 15,160 3 %
Purchases of property, plant and equipment and intangible assets (US$ 9,621 7,086 36 %
millions)
Free cash flow¹ (US$ millions) 5,553 7,657 (27) %
Consolidated sales revenue (US$ millions) 53,658 54,041 (1) %
Underlying EBITDA¹ (US$ millions) 23,314 23,892 (2) %
Profit after tax attributable to owners of Rio Tinto (net earnings) (US$ 11,552 10,058 15 %
millions)
Underlying earnings per share (EPS)¹ (US cents) 669.5 725.0 (8) %
Ordinary dividend per share (US cents) 402.0 435.0 (8) %
Underlying return on capital employed (ROCE)¹ 18% 20%
At 31 December 2024 At 31 December 2023
Net debt¹ (US$ millions) 5,491 4,231 30 %
Rio Tinto Chief Executive Jakob Stausholm said: "We continue to build on our
momentum with another set of strong operational and financial results. With
underlying EBITDA of $23.3 billion and operating cash flow of $15.6 billion,
we are increasing our investments to underpin our plans for a decade of
profitable growth. We are reporting underlying earnings of $10.9 billion,
after taxes and government royalties of $8.2 billion, and a healthy return on
capital employed of 18%.
"Our strong balance sheet enables us to pay a $6.5 billion ordinary dividend,
maintaining our practice of a 60% payout, the ninth consecutive year at the
top end of our payout range, as we continue to invest with discipline.
"We are excited as we head into 2025, with all the building blocks for an
incredibly successful, diversified and growing business in place including the
expected closing of the Arcadium acquisition in March. We will remain
disciplined in the short, medium and long term, while paying attractive
returns to shareholders."
* On a Free on Board (FOB) basis.
(1) This financial performance indicator is a non-IFRS (as defined below)
measure which is reconciled to directly comparable IFRS financial measures
(non-IFRS measures). It is used internally by management to assess the
performance of the business and is therefore considered relevant to readers of
this document. It is presented here to give more clarity around the underlying
business performance of the Group's operations. For more information on our
use of non-IFRS financial measures in this report, see the section entitled
"Alternative performance measures" (APMs) and the detailed reconciliations on
pages 37 to 46. Our financial results are prepared in accordance with IFRS -
see page 32 for further information.
Safety is our top priority. Tragically, there were 5 fatalities in our
business in 2024. On 23 January 2024, a plane crashed shortly after takeoff
near Fort Smith, Northwest Territories, Canada, resulting in the loss of 4
Diavik team members and 2 airline crew. On 26 October 2024, an employee of one
of our contractors was injured at the SimFer Port Project in Morebaya, part of
the Simandou project in Guinea, and subsequently passed away from his
injuries.
Our team is committed to learning how we continuously improve safety. This
remains imperative throughout 2025 and underpins our ability to deliver on our
four objectives.
Prioritising the health of our people, our ore body knowledge and the health
of our assets, we have improved our operational performance and delivered
strong financial results. We have maintained our financial strength, which
allows us to invest for the future to deliver profitable growth, while also
continuing to pay attractive returns.
Continued successful delivery in 2024: accelerating growth in 2025 and beyond
As part of our focus on Best Operator, we aim to safely and sustainably
realise the full value of our assets, through our Safe Production System
(SPS). Our operational performance is improving: in 2024, we delivered over 1%
production growth and a 3% increase in sales volumes, both on a copper
equivalent basis (based on long-term consensus pricing), and by the end of the
year we had commenced deployment of SPS at 31 (~80%) of our sites. Just one
outcome of the program is the achievement of a 5 million tonne production
uplift for Pilbara Iron Ore in 2024 for the second consecutive year.
In line with our Excel in Development objective, we are growing and
diversifying our portfolio, as we build a pipeline for the future:
• at the Oyu Tolgoi copper-gold mine in Mongolia, we commissioned
ventilation Shafts 3 and 4 and are commissioning the conveyor to surface, as
the mine ramps up to 500 thousand tonnes(1) of copper per year from 2028 to
2036.
• at the Simandou iron ore project in Guinea, the SimFer mine(2) is
on track to deliver first production at the mine gate in 2025, ramping up over
30 months to an annualised capacity of 60 million tonnes per year(3) (27
million tonnes per year Rio Tinto share).
• in the Pilbara, we advanced 5 replacement iron ore projects,
including Western Range where first ore is on plan for the first half of 2025.
• we announced a definitive agreement to acquire Arcadium Lithium
plc in an all-cash transaction for $6.7 billion, establishing ourselves as a
global leader in energy transition commodities. The transaction is expected to
close in March 2025.
• we approved $2.5 billion to expand the Rincon project in
Argentina, our first commercial scale lithium operation, to an annual capacity
of 60,000 tonnes of battery grade lithium carbonate.
Aligned with striving for impeccable ESG credentials, the low-carbon
transition continues to be at the heart of our strategy. In 2024, our Scope 1
and 2 emissions, on an equity basis, were 30.7Mt CO(2)e (33.9Mt(4) adjusted
emissions in 2023), 14% below our 2018 baseline of 35.7Mt CO(2)e(4).
In 2024, we reduced our emissions by 3.2Mt CO(2)e, primarily through new
renewable energy contracts. We also made commitments to projects that are
expected to deliver abatement of around 3.6Mt per year in 2030, mostly through
renewable electricity and biofuels. Significant progress on the repowering of
our Gladstone assets was made when we announced two major renewable Power
Purchase Agreements in early 2024, one for solar and one for wind.
We are also supporting our customers and suppliers in reducing emissions from
our value chain, particularly those from steelmaking. We continued to advance
the development of BioIron™, an innovative ironmaking process. When combined
with the use of renewable energy and fast-growing biomass, this has the
potential to reduce CO(2) emissions by up to 95% compared with the current
blast furnace method. We are investing $143 million to build a research and
development facility in Western Australia, scheduled for commissioning in
2026, with a pilot plant 10 times larger than its predecessor.
For further detail, please refer to the climate section of our 2024 Annual
Report released today.
In 2024, we strengthened our social performance capacity to become a better
operator and partner. Together with Voconiq, a third-party engagement science
research company, we launched our global Community Perception Monitoring
program, Local Voices. The program will help us to engage more effectively and
better understand communities' perceptions, leading to improved data-driven
decisions.
In 2024, we completed one of the final recommendations of the Everyday Respect
report; publishing an independent progress review conducted by Elizabeth
Broderick & Co. Change is happening: one of the findings indicates people
are more empowered to speak up and Everyday Respect is now widely considered a
normal conversation within the company, which is a critical step for culture
change.
Developing our talent and diversity, we increased gender diversity to 25.2%
(from 24.3% in 2023). The increases were distributed across all levels of the
organisation with female senior leaders increasing to 32% (from 30.1% in
2023).
1. The 500 thousand tonne per year copper production target (stated as
recoverable metal) for the Oyu Tolgoi underground and open pit mines for the
years 2028 to 2036 was previously reported in a release to the Australian
Securities Exchange (ASX) dated 11 July 2023 "Investor site visit to Oyu
Tolgoi copper mine, Mongolia". All material assumptions underpinning that
production target continue to apply and have not materially changed.
2. SimFer Jersey Limited is a joint venture between the Rio Tinto Group
(53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint
venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail
Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)).
SimFer S.A. is the holder of the mining concession covering Simandou Blocks 3
& 4, and is owned by the Guinean State (15%) and SimFer Jersey Limited
(85%). SimFer Infraco Guinée S.A. will deliver SimFer's scope of the
co-developed rail and port infrastructure, and is co-owned by SimFer Jersey
(85%) and the Guinean State (15%). SimFer Jersey will ultimately own 42.5% of
Compagnie du Transguinéen, which will own and operate the co-developed
infrastructure during operations.
3. The estimated annualised capacity of approximately 60 million dry
tonnes per annum iron ore for the Simandou life of mine schedule was
previously reported in a release to the ASX dated 6 December 2023 titled
"Investor Seminar 2023". Rio Tinto confirms that all material assumptions
underpinning that production target and those production profiles continue to
apply and have not materially changed.
4. We have adjusted our 2018 baseline and 2023 emissions to exclude
emissions reductions achieved by divesting assets and allow increases
associated with acquisitions. In 2023, we restated prior year emissions
numbers and our 2018 baseline following an update to our GHG reporting
methodology. Further detail on these changes in reporting is available in our
Scope 1, 2 and 3 Emissions Calculation Methodology.
Guidance
• Our share of capital investment (non-IFRS measure, refer to APMs on page
43) is unchanged. In 2025 we expect it to be ~$11 billion: this includes ~$3
billion in growth, depending on opportunities, ~$4 billion of sustaining
capital, ~$3 to $4 billion of replacement capital and ~$0.3 billion of
decarbonisation capital. Up to 2030, cumulative decarbonisation capital is
expected to be at the lower end of our $5 to $6 billion range, subject to
Traditional Owner and other stakeholder engagement, regulatory approvals and
technology developments, due to the increased role of commercial partnerships.
Mid-term guidance for our share of capital investment is ~$10 to $11 billion.
All capital guidance is subject to ongoing inflationary pressures and exchange
rates.
• In 2025, we expect our ongoing exploration and evaluation expense to be
~$1.0 billion.
• In the coming years, we expect to spend (on a cash basis) ~$1 billion per
year on closure activities as we continuously rehabilitate our operations and
progress work at Argyle, Energy Resources of Australia (ERA), the Gove alumina
refinery and legacy sites. Spend will vary from year to year as we execute
individual programs of work and optimise investment across the portfolio. All
these amounts are fully provided for within our provision for closure costs of
$15.7 billion.
• Effective tax rate on underlying earnings is expected to be around 30%
in 2025.
Unit costs 2024 Actuals 2025 Guidance
Pilbara iron ore unit cash costs, free on board (FOB) basis - US$ per wet 23.0 23.0-24.50
metric tonne
Australian dollar exchange rate 0.66 0.66
Copper C1 net unit costs (includes Kennecott, Oyu Tolgoi and Escondida) - US 142 130-150
cents per lb
Production (Rio Tinto share, unless otherwise stated) 2024 Actuals 2025 Guidance
Pilbara iron ore (shipments, 100% basis) (Mt) 328.6 323 to 338
Bauxite (Mt) 58.7 57 to 59
Alumina (Mt) 7.3 7.4 to 7.8
Aluminium (Mt) 3.3 3.25 to 3.45
Copper (consolidated basis) (kt) 792.6 780 to 850
Titanium dioxide slag (Mt) 1.0 1.0 to 1.2
Iron Ore Company of Canada iron ore pellets and concentrate (Mt) 9.4 9.7 to 11.4
Boric oxide equivalent (Mt) 0.5 ~0.5
• Production guidance is consistent with our Investor Seminar, released on
4 December 2024.
• Iron ore shipments and bauxite production guidance remain subject to
weather impacts.
• Pilbara iron ore guidance remains subject to the timing of approvals for
planned mining areas and heritage clearances. SP10 levels are expected to
remain elevated until replacement projects are delivered.
• On 24 January 2025, we provided an update on Tropical Cyclone Sean which
caused record rainfall along parts of the Pilbara coastline of Western
Australia, flooding a key railcar dumper and closing East Intercourse Island
(EII) port. The rectification works to repair the flood damage to the railcar
dumper are well progressed and commissioning activities have commenced this
week. Our other Pilbara port operations were also impacted by Tropical
Cyclones Tahlia, Vince and Zelia over 5 February to 14 February. The total
losses from all four cyclones are anticipated to be around 13 million tonnes.
We have mitigation plans in place to offset around half of this over the
course of the year. The system has limited ability to mitigate further losses
from weather if incurred. There is no change to full year shipments guidance.
A full assessment of the cost from the weather disruption will be undertaken
at the end of the first quarter.
Financial performance
Income Statement
Net earnings and underlying earnings refer to amounts attributable to the
owners of Rio Tinto. The net profit attributable to the owners of Rio Tinto in
2024 was $11.6 billion (2023: $10.1 billion).
Financial strength through greater diversification
To provide additional insight into the performance of our business, we report
underlying EBITDA and underlying earnings. Underlying EBITDA and underlying
earnings are non-IFRS measures. For definitions and a detailed reconciliation
of underlying EBITDA and underlying earnings to the nearest IFRS measures, see
pages 37 and 41, respectively.
The principal factors explaining the movements in underlying EBITDA are set
out in this table.
US$bn
2023 underlying EBITDA 23.9
Prices (1.6)
Exchange rates 0.3
Volumes and mix 0.2
General inflation (including net impact on provisions) (0.6)
Energy 0.2
Operating cash unit costs 0.6
Exploration and evaluation expenditure (net of profit from disposal of 0.3
interests in undeveloped projects)
Non-cash costs/other 0.1
Change in underlying EBITDA (0.6)
2024 underlying EBITDA 23.3
Financial figures are rounded to the nearest $100 million, hence small
differences may result in the totals.
In 2024, we started to see the benefits of our diversified portfolio and
operational improvements. Higher prices for copper, bauxite and aluminium
together with rising copper and bauxite volumes, and our focus on cost
discipline helped to offset much of the impact of the iron ore price decline,
leading to underlying EBITDA of $23.3 billion.
Lower iron ore price partly offset by stronger copper, bauxite and aluminium
Movements in commodity prices resulted in a $1.6 billion decline in underlying
EBITDA compared with 2023, reflecting the impact of a lower iron ore price,
which was partly offset by higher prices for bauxite and LME copper and
aluminium.
We have included a table of prices and exchange rates on page 47.
The monthly average Platts index for 62% iron fines converted to a Free on
Board (FOB) basis was 11% lower, on average, compared with 2023.
Average LME prices for copper and aluminium were both 8% higher, the bauxite
index was 26% higher and the gold price was 23% higher compared with 2023.
The Midwest premium duty paid for aluminium in the US declined by 17% to $427
per tonne.
Marginal benefit from weaker local currencies
Compared with 2023, on average, the US dollar strengthened by 1% against the
Australian and Canadian dollars. Currency movements increased underlying
EBITDA by $0.3 billion relative to 2023.
Rising copper volumes
A 3% rise in copper equivalent sales volumes led to a $0.2 billion increase in
underlying EBITDA. This was underpinned by 25% higher copper sales volumes,
along with increases in gold, driven by the steady ramp-up of the Oyu Tolgoi
underground mine and higher copper grades at Escondida, which, together with a
7% rise in bauxite volumes, offset the impact of 1% lower iron ore shipments
from the Pilbara.
Impact of inflation partly offset by lower energy prices
The impact of inflation on our cost base lowered underlying EBITDA by $0.6
billion. The easing of diesel prices and lower prices for natural gas partly
offset this, with a favourable impact to underlying EBITDA of $0.2 billion.
Lower market-linked raw material prices, in particular for aluminium and
alumina
We remain focused on cost control, in particular maintaining discipline on
fixed costs. Overall, lower operating cash unit costs benefited underlying
EBITDA by $0.6 billion. This was driven by lower unit costs in Aluminium from
the easing of market-linked raw materials prices, such as caustic, coke and
pitch, in conjunction with higher bauxite volumes. Higher Copper volumes led
to greater cost efficiencies, where we saw a 27% reduction in Copper C1 net
unit costs. Partially offsetting these were slightly lower volumes in the
Pilbara and Iron Ore Company of Canada (IOC), along with diamonds and titanium
dioxide feedstocks as these businesses managed through weaker markets, leading
to fixed cost inefficiencies.
Continued investment in exploration and evaluation
Our ongoing exploration and evaluation expenditure was $0.9 billion, compared
with $1.4 billion in 2023. The decrease was mainly attributable to the
capitalisation of exploration and evaluation expenditure for Simandou from
October 2023. 2023 also included a gain on disposal of 55% of our interest in
the La Granja copper project in Peru ($0.2 billion, pre-tax).
Net earnings
The principal factors explaining the movements in underlying earnings and net
earnings are set out below.
US$bn
2023 net earnings 10.1
Changes in underlying EBITDA (see above) (0.6)
Increase in depreciation and amortisation (pre-tax) in underlying earnings (0.8)
Decrease in interest and finance items (pre-tax) in underlying earnings 0.3
Decrease in tax on underlying earnings 0.5
Increase in underlying earnings attributable to outside interests (0.3)
Total changes in underlying earnings (0.9)
Changes in items excluded from underlying earnings (see below) 2.4
Movement in impairment charges net of reversals 0.1
Movement from consolidation and disposal of interests in businesses 0.9
Movement in closure estimates (non-operating and fully impaired sites) 1.0
Movement in exchange differences and gains/losses on derivatives 0.5
Other (0.1)
2024 net earnings 11.6
Financial figures are rounded to the nearest $100 million, hence small
differences may result in the totals.
Increase in depreciation
Higher depreciation was due to an increase in capital expenditure in prior
years, production growth at Kennecott and lower capitalised depreciation,
which resulted in underlying earnings being $0.8 billion lower than 2023.
Modest decrease in tax on underlying earnings
The effective tax rate on underlying earnings of 28% (2023: 30%) primarily
reflects the mix of profits across different jurisdictions. This, coupled with
lower profits, resulted in tax on underlying earnings being $0.5 billion lower
than 2023.
Increase in underlying earnings attributable to outside interests
In 2024, expenditure at Simandou was capitalised whereas until September 2023
it was expensed, resulting in a year-on-year decrease in costs attributable to
outside interests following the capitalisation.
Items excluded from underlying earnings
The differences between underlying earnings and net earnings are set out in
this table (all numbers are after tax and exclude amounts attributable to
non-controlling interests).
2024 2023
Year ended 31 December US$bn US$bn
Underlying earnings 10.9 11.8
Items excluded from underlying earnings
Net gains on consolidation and disposal of interests in businesses 0.9 -
Impairment charges net of reversals (0.5) (0.7)
Foreign exchange and derivative gains/(losses) on net debt and intragroup 0.2 (0.3)
balances and derivatives not qualifying for hedge accounting
Change in closure estimates (non-operating and fully impaired sites) (0.1) (1.1)
Other 0.2 0.4
Total items excluded from underlying earnings 0.7 (1.7)
Net earnings 11.6 10.1
Financial figures are rounded to the nearest $100 million, hence small
differences may result in the totals.
On page 41 there is a detailed reconciliation from net earnings to underlying
earnings, including pre-tax amounts and additional explanatory notes. The
differences between profit after tax and underlying EBITDA are set out in the
table on page 38.
Net gains on consolidation and disposal of interests in businesses of $0.9
billion primarily related to a gain following the increase in ownership of
Tiwai Point Smelter (NZAS), New Zealand, the sale of Sweetwater, a former
uranium legacy site in Wyoming, United States, and the sale of Dampier Salt's
Lake MacLeod operation in Western Australia.
We recognised impairment charges net of reversals of $0.5 billion (after tax),
mainly related to our alumina refineries in Queensland: a review was triggered
by studies for the double digestion project indicating increased capital
costs. In 2023, we recognised impairment charges net of reversals of $0.7
billion (after tax), also mainly related to our alumina refineries. The full
analysis is set out in note 4 to the consolidated financial statements.
Foreign exchange and derivative gains were $0.2 billion in 2024 compared to a
loss of $0.3 billion in 2023. Exchange losses are largely offset by currency
translation gains recognised in equity and vice-versa. The quantum of US
dollar debt is largely unaffected and we will repay it from US dollar sales
receipts.
In 2023, we excluded $1.1 billion of closure cost charges from underlying
earnings, of which $850 million related to the closure update announced by
Energy Resources of Australia (ERA) on 12 December 2023. This was considered
material and was therefore aggregated with other closure study updates in the
second half of 2023 which were similar in nature. These other updates were at
legacy sites and at the Yarwun alumina refinery, which was expensed due to the
impairment earlier in the year.
Net earnings and underlying earnings refer to amounts attributable to the
owners of Rio Tinto.
Underlying EBITDA and underlying earnings by product group
Underlying EBITDA Underlying earnings
2024 2023 Change 2024 2023 Change
Year ended 31 December US$bn US$bn % US$bn US$bn %
Iron Ore 16.2 20.0 (19) % 9.1 11.9 (23) %
Aluminium 3.7 2.3 61 % 1.5 0.5 176 %
Copper 3.4 2.0 75 % 0.8 0.2 327 %
Minerals 1.1 1.4 (24) % 0.1 0.3 (54) %
Reportable segments total 24.4 25.6 (5) % 11.5 12.9 (11) %
Simandou iron ore project - (0.5) (96) % - (0.2) (76) %
Other operations - (0.1) - % (0.2) (0.3) (27) %
Central pension costs, share-based payments, insurance and derivatives 0.2 0.2 (9) % 0.2 - 375 %
Restructuring, project and one-off costs (0.3) (0.2) 34 % (0.2) (0.1) 59 %
Other central costs (0.8) (1.0) (18) % (0.6) (0.9) (29) %
Central exploration and evaluation (0.2) (0.1) 138 % (0.2) (0.1) 260 %
Net interest 0.4 0.3 24 %
Total 23.3 23.9 (2) % 10.9 11.8 (8) %
Financial figures are rounded to the nearest $100 million, hence small
differences may result in the totals and period-on-period change. Underlying
EBITDA and underlying earnings are non-IFRS measures used by management to
assess the performance of the business and provide additional information
which investors may find useful. For more information on our use of non-IFRS
financial measures in this report, see the section entitled "Alternative
performance measures" (APMs) and the detailed reconciliations on pages 37 to
46.
Simandou iron ore project
We commenced capitalising qualifying costs attributable to the Simandou
project in Guinea from the fourth quarter of 2023. In 2023, we expensed $0.5
billion.
Central and other costs
Pre-tax central pension costs, share-based payments, insurance and derivatives
were a $0.2 billion credit, mainly associated with the premiums paid by the
business to our Captive insurers. This was largely unchanged from 2023:
although there was an insurance charge relating to the Captive's payout of the
process safety incidents at Rio Tinto Iron and Titanium (RTIT) and the forest
fires at IOC in 2024, this movement was offset by unrealised derivative gains
recognised in 2024 (unrealised loss in 2023).
On a pre-tax basis, restructuring, project and one-off central costs increased
modestly as we continue to drive productivity by investing in group-wide
projects.
Other central costs of $0.8 billion (pre-tax) decreased by 18% compared to
2023, reflecting lower costs across a number of our functions together with
higher central recoveries.
On an underlying earnings basis, net interest was a credit of $0.4 billion
(2023: credit of $0.3 billion) with the variance between the two years being
additional costs associated with the refinancing of Oyu Tolgoi in 2023.
Sustained investment in greenfield exploration
We have a strong portfolio of greenfield exploration projects in early
exploration and studies stages, with activity in 17 countries across eight
commodities. This is reflected in our pre-tax central spend of $0.2 billion.
The bulk of this expenditure was focused on copper in Angola, Australia,
Chile, Colombia, Kazakhstan, Papua New Guinea, Peru, the US and Zambia, nickel
in Australia, Brazil, Canada and Finland, lithium in Australia, Brazil,
Canada, Finland, Rwanda and the US, potash in Canada, diamonds in Angola,
heavy mineral sands in South Africa and rutile-graphite in Malawi. The Rio
Tinto operated Nuevo Cobre joint venture copper project in Chile continues to
make good progress with permitting advancing alongside ongoing geological
field programs.
Strong cash flow generation as we invest for the future
2024 2023
Year ended 31 December US$bn US$bn
Net cash generated from operating activities 15.6 15.2
Purchases of property, plant and equipment and intangible assets (9.6) (7.1)
Lease principal payments (0.5) (0.4)
Free cash flow¹ 5.6 7.7
Dividends paid to equity shareholders (7.0) (6.5)
Net funding relating to Simandou (outside of free cash flow) 0.5 -
Non Simandou-related acquisitions (mainly Matalco in 2023) - (0.8)
Other (0.3) (0.4)
Movement in net debt¹ (1.3) -
Financial figures are rounded to the nearest $100 million, hence small
differences may result in the totals.
• $15.6 billion in net cash generated from operating activities, which was
3% higher than 2023, reflects a 67% underlying EBITDA cash conversion
(compared to 63% in 2023). This was driven by favourable working capital
movements (+$0.1 billion in 2024; -$0.9 billion in 2023), along with higher
dividends from Escondida ($1.0 billion in 2024; $0.6 billion in 2023). We
managed our inventory levels down in 2024 to a more optimised level, which
included processing concentrate at Kennecott following the smelter rebuild in
2023.
• Taxes paid of $4.2 billion, which were $0.5 billion lower than 2023,
mainly reflected lower profits in Australia.
• Purchases of property, plant and equipment and intangible assets
(capital expenditure) of $9.6 billion comprised $2.7 billion of growth, $2.5
billion of replacement, $4.2 billion of sustaining and $0.2 billion of
decarbonisation capital (in addition to $0.3 billion of decarbonisation spend
in operating costs). We funded our share of capital expenditure in 2024 from
internal sources. We will continue to fund our capital program in accordance
with our capital allocation framework.
• $7.0 billion of dividends reflected the 2023 final ordinary and the 2024
interim ordinary dividends.
• In 2024, we received $1.5 billion from CIOH for its share of cash
expenditures for the Simandou project and we paid $1.0 billion to WCS to
support funding development of the infrastructure.
• The above movements, together with $0.3 billion of other movements,
resulted in an increase in net debt¹ of $1.3 billion in 2024 to $5.5 billion
at 31 December 2024.
Year ended 31 December 2024 2023
US$m US$m
Purchase of property, plant and equipment and intangible assets 9,621 7,086
Funding provided by the group to EAUs((a)) 965 -
Less: Equity or shareholder loan financing received/due from non-controlling (1,063) (125)
interests((b))
Rio Tinto share of capital investment 9,523 6,961
(a) In 2024, funding provided by the group to EAUs relates to funding of
WCS rail and port entities (WCS) in relation to the Simandou project,
consisting of a direct equity investment in WCS of US$431 million and loans
provided totalling US$534 million
(b) In 2024, we received US$1,505 million from Chalco Iron Ore Holdings
Ltd (CIOH), of which US$1,063 million relates to CIOH's 47% share of capital
expenditure incurred on the Simandou project and associated funding provided
by the Group to EAUs during the year, accounted for on an accrual basis.
• Our share of capital investment in 2024 was $9.5 billion, comprised of
capital expenditure of $9.6 billion and funding provided by the group to
equity accounted units for its share of investment of $1.0 billion, net of
equity/shareholder loan financing received/due from non-controlling interests
of $1.1 billion.
(1) This financial performance indicator is a non-IFRS (as defined below)
measure which is reconciled to directly comparable IFRS financial measures
(non-IFRS measures). It is used internally by management to assess the
performance of the business and is therefore considered relevant to readers of
this document. It is presented here to give more clarity around the underlying
business performance of the Group's operations. For more information on our
use of non-IFRS financial measures in this report, see the section entitled
"Alternative performance measures" (APMs) and the detailed reconciliations on
pages 37 to 46. Our financial results are prepared in accordance with IFRS -
see page 32 for further information.
Retaining a strong balance sheet
Net debt(1) of $5.5 billion at 31 December 2024 increased by $1.3 billion
compared to 2023 year end.
Our net gearing ratio(1) (net debt to total capital) was 9% at 31 December
2024 (31 December 2023: 7%). See page 45.
Our total financing liabilities excluding net debt derivatives at 31 December
2024 (see page 45) were $13.8 billion (31 December 2023: $14.4 billion) and
the weighted average maturity was 11 years. At 31 December 2024, 76% of these
liabilities were at floating interest rates (84% excluding leases). The
maximum amount within non-current borrowings maturing in any one calendar year
is $1.67 billion, which matures in 2033.
We had $8.7 billion in cash and cash equivalents plus other short-term highly
liquid investments at 31 December 2024 (31 December 2023: $10.5 billion).
Provision for closure costs
At 31 December 2024, provisions for close-down and restoration costs and
environmental clean-up obligations were $15.7 billion (31 December 2023:
$17.2 billion). There was a revision of the closure discount rate to 2.5%
(from 2.0%), reflecting expectations of higher yields from long-dated bonds,
including the 30-year US Treasury Inflation Protected Securities, a key input
to our closure discount rate. This resulted in a $1.0 billion decrease, most
of which was adjusted against capitalised closure costs, with a $0.2 billion
credit reflected in underlying EBITDA relating to our closed and non-operating
sites. The provision further reduced by $1.1 billion due to the strengthening
of the US dollar against local currencies. During the year, there was a
$1.1 billion spend against the provision as we advanced our closure
activities at Argyle, ERA, the Gove alumina refinery and other legacy sites,
along with progressive closure activity across our operations.
( )
(1) This financial performance indicator is a non-IFRS (as defined below)
measure which is reconciled to directly comparable IFRS financial measures
(non-IFRS measures). It is used internally by management to assess the
performance of the business and is therefore considered relevant to readers of
this document. It is presented here to give more clarity around the underlying
business performance of the Group's operations. For more information on our
use of non-IFRS financial measures in this report, see the section entitled
"Alternative performance measures" (APMs) and the detailed reconciliations on
pages 37 to 46. Our financial results are prepared in accordance with IFRS -
see page 32 for further information.
Our shareholder returns policy
The Board is committed to maintaining an appropriate balance between cash
returns to shareholders and investment in the business, with the intention of
maximising long-term shareholder value.
At the end of each financial period, the Board determines an appropriate total
level of ordinary dividend per share. This takes into account the results for
the financial year, the outlook for our major commodities, the Board's view of
the long-term growth prospects of the business and the company's objective of
maintaining a strong balance sheet. The intention is that the balance between
the interim and final dividend be weighted to the final dividend.
The Board expects total cash returns to shareholders over the longer term to
be in a range of 40% to 60% of underlying earnings in aggregate through the
cycle. Acknowledging the cyclical nature of the industry, it is the Board's
intention to supplement the ordinary dividend with additional returns to
shareholders in periods of strong earnings and cash generation.
Nine-year track record of 60% payout on the ordinary dividend, at top end of
range
2024 2023
US$bn US$bn
Ordinary dividend
Interim⁽ª⁾ 2.9 2.9
Final⁽ª⁾ 3.7 4.2
Full-year ordinary dividend⁽ª⁾ 6.5 7.1
Payout ratio on ordinary dividend 60% 60%
(a) Based on weighted average number of shares and declared dividends per
share for the respective periods and excluding foreign exchange impacts on
payment. Financial figures are rounded to the nearest $100 million, hence
small differences may result in the totals.
As announced on 26 July 2024, we determine Rio Tinto plc and Rio Tinto Limited
dividends in US dollars, our reporting currency. Historically, we have
declared and announced these dividends in pounds sterling and Australian
dollars, respectively. However, following changes to Rio Tinto Limited's
constitution approved by shareholders in 2024, we now declare and announce
dividends in US dollars.
Ordinary dividend per share declared 2024 2023
Interim (US cents) 177.0 177.0
Final (US cents) 225.0 258.0
Full-year (US cents) 402.0 435.0
The 2024 final ordinary dividend to be paid to our Rio Tinto Limited
shareholders will be fully franked. The Board expects Rio Tinto Limited to be
in a position to pay fully franked dividends for the foreseeable future.
On 17 April 2025, we will pay the 2024 final ordinary dividend to holders of
Rio Tinto plc and Rio Tinto Limited ordinary shares and holders of Rio Tinto
plc ADRs (American Depositary Receipts) on the register at the close of
business on 7 March 2025 (record date). The ex-dividend date for Rio Tinto plc
and Rio Tinto Limited holders is 6 March 2025. For holders of Rio Tinto plc
ADRs, the ex-dividend date is 7 March 2025.
Rio Tinto plc and Rio Tinto Limited shareholders may choose to receive their
dividend in US dollars, pounds sterling, Australian dollars or New Zealand
dollars. Currency conversions will be based on the prevailing exchange rates
seven business days prior to the dividend payment date. Shareholders must
register any changes to their currency elections by 27 March 2025.
ADR holders receive dividends at the declared rate in US dollars.
We will operate our Dividend Reinvestment Plans for the 2024 final dividend
(visit riotinto.com for details). Rio Tinto plc and Rio Tinto Limited
shareholders' elections to participate in the Dividend Reinvestment Plans must
be received by 27 March 2025. Purchases under the Dividend Reinvestment Plans
are made on or as soon as practicable after the dividend payment date and at
prevailing market prices. There is no discount available.
Capital projects
Project Total Capital remaining to be spent from Status/Milestones
(Rio Tinto 100% capital cost 1 Jan 2025
owned unless (100% unless
otherwise stated) otherwise stated)
Ongoing
Iron ore
Investment in the Western Range iron ore project in Western Australia, a joint $1.3bn $0.4bn Approved in September 2022, the mine will have a capacity of 25 million tonnes
venture between Rio Tinto (54%) and China Baowu Steel Group Co. Ltd (46%) in
per year. The project includes construction of a primary crusher and an 18
the Pilbara to sustain production of the Pilbara Blend(TM) from Rio Tinto's (Rio Tinto share)(1) (Rio Tinto kilometre conveyor connection to the Paraburdoo processing plant. Construction
existing Paraburdoo hub.
is now 90% complete, with fabrication and overland conveyor belt installation
share) finalised. We continue to focus on completion of the new crushing and
screening facilities, with first ore from that new system on plan for the
first half of 2025.
Investment in the Simandou high-grade iron ore project in Guinea in $6.2bn $3.8bn Announced in December 2023, first production at the SimFer mine gate is
partnership with CIOH, a Chinalco-led consortium (the SimFer joint venture)
expected in 2025, ramping up over 30 months to a 60 million tonne per year
and co-development of the rail and port infrastructure with Winning Consortium (Rio Tinto (Rio Tinto capacity (27 million tonnes Rio Tinto share)⁵.
Simandou² (WCS), Baowu and the Republic of Guinea (the partners) for the
export of up to 120 million tonnes per year of iron ore mined by SimFer's and share) share) For the SimFer mine, bulk earthworks are progressing to plan. All mine
WCS's respective mining concessions.³ The SimFer joint venture⁴ will construction contracts are complete, and the two initial crushers are now
develop, own and operate a 60 million tonne per year⁵ mine in blocks 3 & commissioned, with first ore crushed on 1 January 2025.
4. WCS will construct the project's ~536 kilometre shared dual track main
line, a 16 kilometre spur connecting its mine to the mainline as well as the For the SimFer infrastructure scope, all construction milestones for the
WCS barge port, while SimFer will construct the ~70 kilometre spur line, period stipulated by the Government of Guinea were achieved. In connection
connecting its mining concession to the main rail line, and the transhipment with SimFer's construction of the ~70 kilometre spur line, which will connect
vessel (TSV) port. The conditions for this investment were satisfied in July Simandou's mine operations to the shared mainline, with the arrival of track
2024. laying locomotives, 8.5 kilometres of rail was installed. In October 2024,
construction of the 275 metre Milo River bridge was completed. Tunnel
excavation activity on the SimFer scope is now more than 75% complete, with
construction at the port continuing to advance on the TSV wharf and rail car
dumper infrastructure. Expectations for delivery of the first TSVs remain on
plan.
Aluminium
Investment to expand the low-carbon AP60 aluminium smelter at the Complexe $1.1bn $0.8bn Approved in June 2023, AP60 expansion construction activities remain on
Jonquière in Quebec. The investment includes up to $113 million of financial schedule. Once completed, the project will add 96 new AP60 pots, increasing
support from the Quebec government. capacity by approximately 160,000 tonnes of primary aluminium per year by the
end of 2026. This new capacity, in addition to 30,000 tonnes of new
Commissioning is expected in the first half of 2026, with the smelter fully recycling capacity at Arvida expected to open in the fourth quarter of 2025,
ramped up by the end of that year. Once completed, it is expected to be in the will offset the 170,000 tonnes of capacity lost through the gradual closure of
first quartile of the industry operating cost curve. potrooms at the Arvida smelter from 2024.
Copper
Phase two of the south wall pushback to extend mine life at Kennecott in Utah $1.8bn $0.9bn Approved in December 2019, stripping commenced in 2020 and will continue
by a further six years. The project largely consists of mine stripping through 2027. In March 2023, a further $0.3 billion was approved to primarily
activities and includes some additional infrastructure development, including mitigate the risk of failure in an area of geotechnical instability known as
a tailings facility expansion. The project will allow mining to continue into Revere, necessary to both protect open pit value and enable underground
a new area of the orebody between 2026 and 2032. development.
Investment in the Kennecott underground development of the North Rim Skarn $0.6bn $0.4bn Approved in June 2023, production from NRS⁶ is expected to commence in
(NRS) area. mid-2025, delivering around 250,000 tonnes through to 2033⁷. A further $0.1
billion was approved in December 2024 for additional infrastructure and
geotechnical controls.
Development of the Oyu Tolgoi underground copper-gold mine in Mongolia (Rio $7.06bn $0.5bn First ore on the conveyor to surface belt was achieved in October 2024, with
Tinto 66%), which is expected to produce (from the open pit and underground) the conveyor system now able to transport ore to the surface from a depth of
an average of ~500,000 tonnes⁸ of copper per year from 2028 to 2036. 1,300 metres. Load and production testing of the conveyor system is
progressing. Construction works for the concentrator conversion remain on
schedule, with commissioning activities commencing in the fourth quarter of
2024 and forecast to be progressively completed through to the second quarter
of 2025. Construction of primary crusher 2 is progressing to plan and remains
on track to be completed by the end of 2025.
Minerals
Expansion of the Rincon project in Argentina to 60,000 tonnes per year of $2.5bn $2.5bn Approved in December 2024, construction of the expanded plant is scheduled to
battery grade lithium carbonate, comprised of the 3,000-tonne starter plant begin in mid-2025, subject to permitting. First production from the expanded
and 57,000-tonne expansion plant. The mine is expected to have a 40-year⁹ plant is expected in 2028 followed by a three-year ramp-up to full capacity.
life and operate in the first quartile of the cost curve. We released
(https://www.riotinto.com/en/invest/financial-news-performance/resources-and-reserves)
the Rincon Project Mineral Resources and Ore Reserves statement on 4 December
2024.
1. Rio Tinto share of the Western Range capital cost includes 100% of
funding costs for Paraburdoo plant upgrades.
2. WCS is the holder of Simandou North Blocks 1 & 2 (with the
Government of Guinea holding a 15% interest in the mining vehicle and WCS
holding 85%) and associated infrastructure. WCS was originally held by WCS
Holdings, a consortium of Singaporean company, Winning International Group
(50%) and Weiqiao Aluminium (part of the China Hongqiao Group) (50%). On 19
June 2024, Baowu Resources completed the acquisition of a 49% share of WCS
mine and infrastructure projects with WCS Holdings holding the remaining 51%.
In the case of the mine, Baowu also has an option to increase to 51% during
operations. During construction, SimFer will hold 34% of the shares in the WCS
infrastructure entities with WCS holding the remaining 66%.
3. WCS holds the mining concession for Blocks 1 & 2, while SimFer
holds the mining concession for Blocks 3 & 4. SimFer and WCS will
independently develop their mines.
4. SimFer Jersey Limited is a joint venture between the Rio Tinto Group
(53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint
venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail
Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)).
SimFer S.A. is the holder of the mining concession covering Simandou Blocks 3
& 4, and is owned by the Guinean State (15%) and SimFer Jersey Limited
(85%). SimFer Infraco Guinée S.A. will deliver SimFer's scope of the
co-developed rail and port infrastructure, and is co-owned by SimFer Jersey
(85%) and the Guinean State (15%). SimFer Jersey will ultimately own 42.5% of
Compagnie du Transguinéen, which will own and operate the co-developed
infrastructure during operations.
5. The estimated annualised capacity of approximately 60 million dry
tonnes per annum iron ore for the Simandou life of mine schedule was
previously reported in a release to the Australian Securities Exchange (ASX)
dated 6 December 2023 titled "Investor Seminar 2023". Rio Tinto confirms that
all material assumptions underpinning that production target continue to apply
and have not materially changed.
6. The NRS Mineral Resources and Ore Reserves, together with the Lower
Commercial Skarn (LCS) Mineral Resources and Ore Reserves, form the
Underground Skarns Mineral Resources and Ore Reserves.
7. The 250 thousand tonne copper production target for the Kennecott
underground mines over the years 2023 to 2033 was previously reported in a
release to the Australian Securities Exchange (ASX) dated 20 June 2023 "Rio
Tinto invests to strengthen copper supply in US". All material assumptions
underpinning that production target continue to apply and have not materially
changed.
8. The 500 thousand tonne per year copper production target (stated as
recoverable metal) for the Oyu Tolgoi underground and open pit mines for the
years 2028 to 2036 was previously reported in a release to the Australian
Securities Exchange (ASX) dated 11 July 2023 "Investor site visit to Oyu
Tolgoi copper mine, Mongolia". All material assumptions underpinning that
production target continue to apply and have not materially changed.
9. The production target of approximately 53 kt of battery grade lithium
carbonate per year for a period of 40 years was previously reported in a
release to the ASX dated 4 December 2024 titled "Rincon Project Mineral
Resources and Ore Reserves: Table 1". Rio Tinto confirms that all material
assumptions underpinning that production target continue to apply and have not
materially changed. Plans are in place to build for a capacity of 60 kt of
battery grade lithium carbonate per year with debottlenecking and improvement
programs scheduled to unlock this additional throughput.
Future options
Status
Iron Ore: Pilbara brownfields
Over the medium term, our Pilbara system capacity remains between 345 and 360 We continue to work closely with local communities, Traditional Owners and
million tonnes per year. Meeting this range, and the planned product mix, will governments to progress approvals for these new mining projects. We continue
require the approval and delivery of the next tranche of replacement mines to advance our next tranche of Pilbara mine replacement studies at Hope Downs
over the next five years. 1 (Hope Downs 2 and Bedded Hilltop), Brockman 4 (Brockman Syncline 1), Greater
Nammuldi and West Angelas. Funding for the full execution of the Brockman 4
project was obtained in fourth quarter of 2024. Early works and design are
underway for the Brockman 4 and Hope Downs 1 projects. Environmental and
heritage approvals are progressing and timelines remain subject to receiving
these approvals. The Greater Nammuldi project continues to progress at a rate
behind the original development schedule.
Iron Ore: Rhodes Ridge
In October 2022, Rio Tinto (50%) and Wright Prospecting Pty Ltd (50%) agreed In December 2023, we announced approval of a $77 million pre-feasibility study
to modernise the joint venture covering the Rhodes Ridge project in the (PFS). The PFS continues to progress with good engagement with Traditional
Eastern Pilbara, providing a pathway for development utilising Rio Tinto's Owners and government. The PFS, which is targeting an initial capacity of up
rail, port and power infrastructure. to 40 million tonnes per year, subject to relevant approvals, remains on track
to be completed in 2025. First ore is expected by the end of the decade.
Longer term, the resource could support a world-class mining hub with a
potential capacity of more than 100 million tonnes of high-quality iron ore a
year.
Lithium: Jadar
Development of the greenfield Jadar lithium-borates project in Serbia will On 16 July 2024, the Constitutional Court of Serbia issued a decision stating
include an underground mine with associated infrastructure and equipment, as the 2022 decree by the Government of Serbia to abolish the Jadar project
well as a beneficiation chemical processing plant. spatial plan was unconstitutional and illegal. Subsequently, the Government of
Serbia has reinstated the spatial plan to its previously adopted form.
The Board committed funding in July 2021, subject to receiving all relevant Following the decisions, we have continued to focus on consultation with all
approvals, permits and licences. The studies and capital estimates will need key stakeholders, including providing comprehensive factual information about
to be updated before project approval. the project. The application process for obtaining the Exploitation Field
Licence (EFL) continued during the fourth quarter of 2024. The EFL is
essential for commencing fieldwork, including detailed geotechnical
investigations, while cultural heritage and environmental surveys have
resumed. The Environmental Impact Assessment process for the scoping and
content for the mine progressed through the public consultation phase. This
step includes legally mandated consultations, which the project supports, to
encourage an open, fact-based dialogue.
Mineral Sands: Zulti South
Development of the Zulti South project at Richards Bay Minerals (RBM) in South Approved in April 2019 to underpin RBM's supply of zircon and ilmenite over
Africa (Rio Tinto 74%). the life of the mine. The project remains on indefinite suspension, while a
feasibility study refresh is underway.
Copper: Resolution
The Resolution Copper project is a proposed underground copper mine in the We continue to await a decision from the U.S. Supreme Court on the petition
Copper Triangle, in Arizona, US (Rio Tinto 55%). filed by the Apache Stronghold requesting to hear its case to stop the land
exchange between Resolution Copper and the federal government. Separately
the Supreme Court denied a petition from the San Carlos Apache Tribe, asking
the Court to review a decision by the Arizona Supreme Court regarding a water
discharge permit issued to Resolution Copper. We continue to progress the
Final Environmental Impact Statement with the United States Forest Service,
however they have yet to advise on the date of republication. We also advanced
partnership discussions with several federally-recognised Native American
Tribes. While there is significant local support for the project, we respect
the views of groups who oppose it and will continue our efforts to address and
mitigate concerns.
Copper: Winu
In late 2017, we discovered copper-gold mineralisation at the Winu project in In December 2024, we signed
the Paterson Province in Western Australia. In 2021, we reported our first (https://www.riotinto.com/en/news/releases/2024/rio-tinto-and-sumitomo-metal-mining-to-partner-on-winu-copper-gold-project)
Indicated Mineral Resource. The pathway remains subject to regulatory and a Term Sheet with Sumitomo Metal Mining for a Joint Venture to deliver the
other required approvals. project. A pre-feasibility study with an initial development of processing
capacity of up to 10 million tonnes per year is expected to be completed in
2025, along with the submission of an Environmental Review Document under the
EPA Environmental Impact Assessment process. Project Agreement negotiations
with Nyangumarta and the Martu Traditional Owner Groups remain our
priority.
Copper: La Granja
In August 2023, we completed a transaction to form a joint venture with First FQM acquired a 55% stake for $105 million and will invest up to a further $546
Quantum Minerals (FQM) that will work to unlock the development of the La million into the joint venture to sole fund capital and operational costs to
Granja project in Peru, one of the largest undeveloped copper deposits in the take the project through a feasibility study and toward development. All
world, with potential to be a large, long-life operation. subsequent expenditures will be applied on a pro-rata basis in line with
shared ownership. FQM is currently progressing community engagement and
engineering studies.
Aluminium: ELYSIS
ELYSIS, our joint venture with Alcoa, supported by Apple, the Government of We will install carbon free aluminium smelting cells at our Arvida smelter in
Canada and the Government of Quebec, is developing a breakthrough inert anode Quebec using the first technology licence issued by the ELYSIS joint venture.
technology that eliminates all direct greenhouse gases from the aluminium We will design, engineer and build a demonstration plant equipped with ten
smelting process. pots operating at 100 kiloamperes (kA), for a total investment of $285 million
(Rio Tinto $179 million, Government of Quebec $106 million). The plant will
have an annual capacity of 2,500 tonnes of commercial quality aluminium, with
first production targeted by 2027.
The joint venture is continuing its R&D program to scale up the ELYSIS(TM)
technology. It has begun commissioning the larger prototype 450 kA cells at
the Alma smelter, with the start-up sequence set to begin in 2025 (previously
2024).
Review of operations
Iron Ore
Year ended 31 December 2024 2023 Change
Pilbara production (million tonnes - 100%) 328.0 331.5 (1) %
Pilbara shipments (million tonnes - 100%) 328.6 331.8 (1) %
Salt production (million tonnes - Rio Tinto share)¹ 5.8 6.0 (3) %
Segmental revenue (US$ millions) 29,339 32,249 (9) %
Average realised price (US$ per dry metric tonne, FOB basis) 97.4 108.4 (10) %
Underlying EBITDA (US$ millions) 16,249 19,974 (19) %
Pilbara underlying FOB EBITDA margin² 65% 69%
Underlying earnings (US$ millions) 9,097 11,882 (23) %
Net cash generated from operating activities (US$ millions) 11,652 14,045 (17) %
Capital expenditure (US$ millions)³ (3,012) (2,588) 16 %
Free cash flow (US$ millions) 8,561 11,374 (25) %
Underlying return on capital employed⁴ 50% 64%
Production figures are sometimes more precise than the rounded numbers shown,
hence small differences may result in the year on year change.
1. Dampier Salt is reported within Iron Ore, reflecting management
responsibility. Iron Ore Company of Canada continues to be reported within
Minerals. The Simandou iron ore project in Guinea reports to the Chief
Technical Officer and is reported outside the Reportable segments.
2. The Pilbara underlying free on board (FOB) EBITDA margin is defined as
Pilbara underlying EBITDA divided by Pilbara segmental revenue,
excluding freight revenue.
3. Capital expenditure is the net cash outflow on purchases less sales of
property, plant and equipment; capitalised evaluation costs; and purchases
less sales of other intangible assets.
4. Underlying return on capital employed (ROCE) is defined as underlying
earnings excluding net interest divided by average capital employed.
Financial performance
Underlying EBITDA of $16.2 billion was 19% lower than 2023, primarily due to
lower realised prices ($2.7 billion) and marginally lower shipments.
Unit costs of $23.0 per tonne were $1.5 per tonne higher than 2023, driven by
lower iron ore production and inflation.
Our Pilbara operations delivered an underlying FOB EBITDA margin of 65%,
compared with 69% in 2023, largely due to the lower iron ore price and lower
volumes.
We price the majority of our iron ore sales (78%) by reference to the average
index price for the month of shipment. In 2024, we priced approximately 10% of
sales with reference to the prior quarter's average index lagged by one month
with the remainder sold either on current quarter average, or other
mechanisms. We made approximately 75% of sales including freight and 25% on an
FOB basis.
We achieved an average iron ore price of $89.6 per wet metric tonne (2023:
$99.7 per wet metric tonne) on an FOB basis, equivalent to $97.4 per dry
metric tonne, with an 8% moisture assumption (2023: $108.4 per dry metric
tonne). This compares to the average price for the monthly average Platts
index for 62% iron fines converted to a FOB basis of $98.4 per dry metric
tonne (2023: $110.3 per dry metric tonne).
Segmental revenue for our Pilbara operations included freight revenue of $2.3
billion (2023: $2.1 billion).
Net cash generated from operating activities of $11.7 billion was 17% lower
than 2023, driven by the same drivers as underlying EBITDA. After capital
investment, which included $0.4 billion increased investment in Pilbara
replacement projects, free cash flow of $8.6 billion was $2.8 billion lower
than 2023.
Review of operations
Pilbara operations produced 328.0 million tonnes (100% basis), 1% lower than
2023. Shipments (100% basis) were also 1% lower. Production was affected by
depletion, predominantly at Paraburdoo as we transition to Western Range and
Yandicoogina, as well as higher than average rainfall. The Safe Production
System target of 5 million tonnes for 2024 was achieved for the second
consecutive year. Gudai-Darri demonstrated 50 million tonne per annum rates
during the fourth quarter. Sustaining production at these rates is subject to
the timing of approvals for planned mining areas and heritage clearances, and
continuation of the debottlenecking program at the main plant.
We grew our portside business in 2024, with total iron ore sales in China of
29.9 million tonnes (23.3 million tonnes in 2023). At the end of December,
inventory levels were 7.1 million tonnes (6.4 million tonnes at the end of
December 2023), including 4.9 million tonnes of Pilbara product. In 2024,
approximately 89% of our portside sales were either screened or blended in
Chinese ports (86% in 2023).
In December 2024, we completed
(https://www.riotinto.com/en/news/releases/2024/rio-tinto-completes-sale-of-lake-macleod-operation)
the sale of Dampier Salt Limited's Lake MacLeod operation to Leichhardt
Industrials Group for consideration of A$375 million.
Aluminium
Year ended 31 December 2024 2023 Change
Bauxite production ('000 tonnes - Rio Tinto share) 58,653 54,619 7 %
Alumina production ('000 tonnes - Rio Tinto share) 7,303 7,537 (3) %
Aluminium production ('000 tonnes - Rio Tinto share) 3,296 3,272 1 %
Segmental revenue (US$ millions) 13,650 12,285 11 %
Average realised aluminium price (US$ per tonne) 2,834 2,738 4 %
Underlying EBITDA (US$ millions) 3,673 2,282 61 %
Underlying EBITDA margin (integrated operations) 30% 21%
Underlying earnings (US$ millions) 1,483 538 176 %
Net cash generated from operating activities (US$ millions) 3,032 1,980 53 %
Capital expenditure - excluding EAUs (US$ millions)¹ (1,694) (1,331) 27 %
Free cash flow (US$ millions) 1,302 619 110 %
Underlying return on capital employed² 10% 3%
1. Capital expenditure is the net cash outflow on purchases less sales of
property, plant and equipment; capitalised evaluation costs; and purchases
less sales of other intangible assets. It excludes equity accounted units
(EAUs).
2. Underlying return on capital employed (ROCE) is defined as underlying
earnings excluding net interest divided by average capital employed.
Financial performance
Overall we delivered a significant uplift in profitability for our Aluminium
business with a 61% increase in underlying EBITDA to $3.7 billion, underlying
EBITDA margin rising nine percentage points to 30% and underlying ROCE of 10%.
We saw an 8% increase in the average LME price with price support from high
alumina costs and the cancellation of Chinese VAT rebates on the export of
semi-finished goods. Market-related costs for key materials such as caustic,
coke and pitch moderated with some of this flowing through to underlying
EBITDA, offsetting some of the impact of a higher alumina price. Higher
bauxite volumes from record annual production at Gove and Amrun and increased
bauxite pricing were partially offset by lower alumina production following
the breakage of a third-party gas pipeline in Queensland.
We achieved an average realised aluminium price of $2,834 per tonne, 4% higher
than 2023. The average realised aluminium price comprises the LME price, a
market premium and a value-added product (VAP) premium. The cash LME price
averaged $2,419 per tonne, 8% higher than 2023, while in our key US market,
the Midwest premium duty paid, which is 59% of our total volumes (2023: 57%),
decreased by 17% to $427 per tonne (2023: $512 per tonne). Our VAP sales
represented 46% of the primary metal we sold (2023: 46%) and generated product
premiums averaging $295 per tonne of VAP sold (2023: $354 per tonne).
Our cash generation also improved significantly, with net cash generated from
operating activities of $3.0 billion, a rise of 53%, compared with 2023. Free
cash flow of $1.3 billion reflected capital investment in the business of $1.7
billion.
Review of operations
Bauxite production of 58.7 million tonnes was 7% higher than 2023, exceeding
our guidance. We delivered record annual production at Gove and Amrun
following implementation of the Safe Production System.
We shipped 40.9 million tonnes of bauxite to third parties, 10% higher than
2023. Segmental revenue for bauxite increased 28% to $3.1 billion. This
includes freight revenue of $0.5 billion (2023: $0.5 billion).
Alumina production of 7.3 million tonnes was 3% lower than 2023, due to the
impacts to our Gladstone operations from the breakage of the third-party
operated Queensland Gas Pipeline in March. Gas supplies to our Gladstone
operations from the third-party operated Queensland Gas Pipeline were meeting
100% of our requirements by year-end.
As the result of sanction measures by the Australian Government, Rio Tinto has
taken on 100% of capacity of Queensland Alumina Limited (QAL) for as long as
the sanctions continue. This results in use of Rusal's 20% share of capacity
by Rio Tinto under the tolling arrangement with QAL. This additional output is
excluded from the production tables in this report as QAL remains 80% owned by
Rio Tinto and 20% owned by Rusal.
Aluminium production of 3.3 million tonnes was 1% higher than 2023. At our New
Zealand Aluminium Smelter (NZAS), production continued to ramp up following a
previous call from Meridian Energy to reduce electricity usage in August 2024,
for which we are compensated. As previously reported, we expect the ramp-up to
run through to the second quarter of 2025.
We completed
(https://www.riotinto.com/en/news/releases/2024/rio-tinto-completes-acquisition-of-sumitomos-20_64-stake-in-new-zealands-aluminium-smelter)
the previously announced acquisition
(https://www.riotinto.com/en/news/releases/2024/long-term-future-for-new-zealands-tiwai-point-aluminium-smelter-secured-with-new-power-deals)
of Sumitomo Chemical Company's (SCC's) 20.64% interest in NZAS on 1 November
2024 and now fully own the Tiwai Point aluminium smelter.
We also completed
(https://www.riotinto.com/en/news/releases/2024/rio-tinto-completes-acquisition-of-sumitomos-20_64-stake-in-new-zealands-aluminium-smelter)
the previously announced acquisition of SCC's 2.46% stake in Boyne Smelters
Limited (BSL). The completion of this transaction, along with the recently
completed
(https://www.riotinto.com/en/news/releases/2024/rio-tinto-to-acquire-mitsubishis-11_65-stake-in-boyne-aluminium-smelter)
acquisition of Mitsubishi's 11.65% stake in BSL, brings Rio Tinto's total
interest in BSL to 73.5%.
Production is reported including these changes in ownership from 1 November
2024.
Copper
Year ended 31 December 2024 2023 Change
Mined copper production ('000 tonnes - consolidated basis) 697 620 13 %
Refined copper production ('000 tonnes - Rio Tinto share) 248 175 42 %
Segmental revenue (US$ millions) 9,275 6,678 39 %
Average realised copper price (US cents per pound)¹ 422 390 8 %
Underlying EBITDA (US$ millions)² 3,437 1,960 75 %
Underlying EBITDA margin (product group operations) 49% 42%
Underlying earnings (US$ millions)² 811 190 327 %
Net cash generated from operating activities (US$ millions)³ 2,590 596 335 %
Capital expenditure - excluding EAUs⁴ (US$ millions) (2,055) (1,976) 4 %
Free cash flow (US$ millions)² 526 (1,386)
Underlying return on capital employed (product group operations)⁵ 6% 3%
1. Average realised price for all units sold. Realised price does not
include the impact of the provisional pricing adjustments, which negatively
impacted revenues by $92 million (2023: $2 million positive).
2. Accountability for Rio Tinto Guinea, our in-country external affairs
office, remains with Bold Baatar, and has therefore moved from the Copper
product group to "Other operations" following his change in role to Chief
Commercial Officer. Accordingly, prior period amounts have been adjusted for
comparability.
3. Net cash generated from operating activities excludes the operating
cash flows of equity accounted units (EAUs) but includes dividends from EAUs
(Escondida).
4. Capital expenditure is the net cash outflow on purchases less sales of
property, plant and equipment, capitalised evaluation costs and purchases less
sales of other intangible assets. It excludes EAUs.
5. Underlying return on capital employed (ROCE) is defined as underlying
earnings (product group operations) excluding net interest divided by average
capital employed.
Financial performance
Improved financials benefited from the steady ramp-up at Oyu Tolgoi, the
strong performance at Escondida and the successful restart of the Kennecott
smelter, following the rebuild in 2023, releasing working capital through the
drawdown of inventories, enhancing operating cash flow. Underlying EBITDA
increased by 75% compared with 2023 and free cash flow turned positive
supported by a strong LME copper price and higher volumes. Overall, mined
copper production rose by 13% and refined copper production by 42%.
Copper C1 net unit costs, at 142 cents per pound, reduced by 53 cents per
pound, or 27%, from 2023, reflecting cost efficiencies on the higher mined
copper production at Oyu Tolgoi and Escondida, and higher refined copper
production at Kennecott, following the smelter rebuild in 2023.
We generated significantly higher net cash from operating activities of $2.6
billion, which included higher dividends from Escondida.
Review of operations
Mined copper production, at 697 thousand tonnes, was 13% higher than 2023,
reflecting the ramp-up of Oyu Tolgoi underground and increased production from
Escondida due to higher grades fed to the concentrator (0.99% versus 0.83%).
This offset geotechnical challenges at Kennecott as instabilities in the pit
wall impacted the mining sequence from the second quarter of 2024.
Refined copper production increased by 42% to 248 thousand tonnes with the
Kennecott smelter and refinery returning to normal operations following the
successful rebuild in 2023.
Oyu Tolgoi underground project
In 2024, we delivered 6.5 million tonnes of ore milled from the underground
mine at an average copper head grade of 1.94% and 34.5 million tonnes from the
open pit with an average grade of 0.39%. The ramp-up remains on track to reach
500 thousand tonnes of copper production per annum (100% basis and stated as
recoverable metal) for the Oyu Tolgoi underground and open pit mines for the
years 2028 to 2036(1).
We continue to see good performance from the underground mine. We completed
drawbell construction at Panel 0, with a total of 124 drawbells opened. The
sinking of ventilation Shafts 3 and 4 was completed in April 2024 following
the breakthrough to surface. Both shafts were commissioned in the second half
of 2024.
In November 2024, Oyu Tolgoi successfully concluded Collective Agreement
negotiations, marking a historic milestone as the first agreement involving
two trade unions at the operation. The agreement will remain in effect for the
next three years.
(1) The 500 thousand tonne per year copper production target (stated as
recoverable metal) for the Oyu Tolgoi underground and open pit mines for the
years 2028 to 2036 was previously reported in a release to the Australian
Securities Exchange (ASX) dated 11 July 2023 "Investor site visit to Oyu
Tolgoi copper mine, Mongolia". All material assumptions underpinning that
production target continue to apply and have not materially changed.
Minerals
Year ended 31 December 2024 2023 Change
Iron ore pellets and concentrates production¹ (million tonnes - Rio Tinto 9.4 9.7 (2) %
share)
Titanium dioxide slag production ('000 tonnes - Rio Tinto share) 990 1,111 (11) %
Borates production ('000 tonnes - Rio Tinto share) 504 495 2 %
Diamonds production ('000 carats - Rio Tinto share) 2,759 3,340 (17) %
Segmental revenue (US$ millions) 5,531 5,934 (7) %
Underlying EBITDA (US$ millions) 1,080 1,414 (24) %
Underlying EBITDA margin (product group operations) 26% 30%
Underlying earnings (US$ millions) 143 312 (54) %
Net cash generated from operating activities (US$ millions) 705 548 29 %
Capital expenditure (US$ millions)² (798) (746) 7 %
Free cash flow (US$ millions) (126) (229) 45 %
Underlying return on capital employed (product group operations)³ 8% 13%
1. Iron Ore Company of Canada (IOC) continues to be reported within
Minerals.
2. Capital expenditure is the net cash outflow on purchases less sales of
property, plant and equipment; capitalised evaluation costs; and purchases
less sales of other intangible assets.
3. Underlying return on capital employed (ROCE) is defined as underlying
earnings (product group operations) excluding net interest divided by average
capital employed.
Financial performance
Underlying EBITDA of $1.1 billion was 24% lower than 2023, primarily due to
lower pricing across most commodities, in particular titanium dioxide
feedstocks, borates and iron ore. Underlying demand for titanium dioxide
feedstocks remains soft while the borates market is recovering from supply
chain disruptions.
Net cash generated from operating activities of $0.7 billion was 29% higher
than 2023, when a build in working capital took place. Further investment is
being made to develop our battery minerals business, resulting in negative
free cash flow of $126 million.
Underlying EBITDA and net cash generated from operating activities in 2024
include $0.2 billion(1) insurance proceeds relating to the process safety
incidents at RTIT and the forest fires at IOC which took place in 2023.
Review of operations
Production of iron ore pellets and concentrate at IOC of 9.4 million tonnes
was 2% lower than 2023 primarily due to an 11-day site-wide shutdown driven by
forest fires in mid-July, resulting in a revised mine plan and maintenance
schedule. We also experienced operational challenges in the mine and
concentrator throughout the year. Annual rail haulage was 36.4 million tonnes,
7% higher than in 2023, driven by continued operational improvements to meet
increasing third-party and IOC demand. Our focus going forward is to
stabilise the operation and achieve safe, cost-effective and consistent
production.
TiO(2) slag production of 990 thousand tonnes was 11% lower than 2023,
primarily due to reduced market demand. A furnace reconstruction, starting in
the first quarter of 2024, continues at our RTIT Quebec Operations. Through
2024, we operated six out of nine furnaces in Quebec and three out of four at
Richards Bay Minerals (RBM).
Borates production was 2% higher than 2023 supported by recovering market
demand, and despite unplanned plant downtime in April 2024.
Our share of carats recovered was 17% lower than 2023. Diamond production was
impacted by the tragic plane crash earlier in 2024, as well as cessation of
A21 open pit mining in the third quarter of 2023.
First lithium was produced from the Rincon project starter plant in Argentina
in November 2024. First commercial production is targeted for the first half
of 2025.
(1) There is no overall financial impact to the Rio Tinto Group, with the
offset reflected centrally.
Price and exchange rate sensitivities
The following sensitivities give the estimated effect on underlying EBITDA,
assuming that each price or exchange rate moved in isolation. The relationship
between currencies and commodity prices is a complex one; movements in
exchange rates can affect movements in commodity prices and vice versa. The
exchange rate sensitivities quoted here include the effect on operating costs
of movements in exchange rates, but do not include the effect of the
revaluation of foreign currency working capital. They should be used with
care.
Average published US$ million impact on
price/exchange rate for 2024 full-year 2024
underlying EBITDA
of a 10% change
in prices/exchange rates
Aluminium (LME) - US$ per tonne 2,419 1,170
Copper (LME) - US cents per pound 415 699
Gold - US$ per troy ounce 2,386 96
Iron ore realised price (FOB basis) - US$ per dry metric tonne 97.4 2,488
Australian dollar against the US dollar 0.66 666
Canadian dollar against the US dollar 0.73 335
Oil (Brent) - US per barrel 81 113
Selected financial information for the
year ended 31 December 2024
Contents
Selected financial information Page number
Consolidated income statement 25
Consolidated statement of comprehensive income 26
Consolidated cash flow statement 27
Consolidated balance sheet 29
Consolidated statement of changes in equity 30
Explanatory notes to the selected financial information
Status of financial information 32
Rio Tinto financial information by business unit 33
Alternative performance measures 37
Consolidated income statement
Year ended 31 December 2024 2023
US$m US$m
Consolidated operations
Consolidated sales revenue 53,658 54,041
Net operating costs (excluding items disclosed separately) (37,745) (37,052)
Impairment charges net of reversals (538) (936)
Gains on consolidation and disposal of interests in businesses 1,214 -
Exploration and evaluation expenditure (net of profit from disposal of (936) (1,230)
interests in undeveloped projects)
Operating profit 15,653 14,823
Share of profit after tax of equity accounted units 838 675
Profit before finance items and taxation 16,491 15,498
Finance items
Net exchange gains/(losses) on external net debt and intragroup balances 322 (251)
Losses on derivatives not qualifying for hedge accounting (92) (54)
Finance income 514 536
Finance costs (763) (967)
Amortisation of discount on provisions (857) (977)
(876) (1,713)
Profit before taxation 15,615 13,785
Taxation (4,041) (3,832)
Profit after tax for the year 11,574 9,953
- attributable to owners of Rio Tinto (net earnings) 11,552 10,058
- attributable to non-controlling interests 22 (105)
Basic earnings per share 711.7c 620.3c
Diluted earnings per share 707.2c 616.5c
Consolidated statement of comprehensive income
2024 2023
US$m US$m
Profit after tax for the year 11,574 9,953
Other comprehensive (loss)/income
Items that will not be reclassified to the income statement:
Remeasurement gains/(losses) on pension and post-retirement healthcare plans 83 (461)
Changes in the fair value of equity investments held at fair value through - (24)
other comprehensive income (FVOCI)
Tax relating to these components of other comprehensive income (22) 152
Share of other comprehensive income/(loss) of equity accounted units, net of 4 (3)
tax
65 (336)
Items that have been/may be subsequently reclassified to the income statement:
Currency translation adjustment((a)) (3,391) 644
Currency translation on operations disposed of, transferred to the income (27) -
statement
Fair value movements:
- Cash flow hedge gains 13 30
- Cash flow hedge losses/(gains) transferred to the income statement 17 (39)
Net change in costs of hedging reserve 4 5
Tax relating to these components of other comprehensive loss (10) 1
Share of other comprehensive (loss)/income of equity accounted units, net of (45) 14
tax
(3,439) 655
Total other comprehensive (loss)/income for the year, net of tax (3,374) 319
Total comprehensive income for the year 8,200 10,272
- attributable to owners of Rio Tinto 8,375 10,335
- attributable to non-controlling interests (175) (63)
(a) Excludes a currency translation charge of US$317 million (2023: gain
of US$47 million) arising on Rio Tinto Limited's share capital for the year
ended 31 December 2024, which is recognised in the Group statement of changes
in equity on page 30.
Consolidated cash flow statement
2024 2023
US$m US$m
Cash flows from consolidated operations((a)) 19,859 20,251
Dividends from equity accounted units 1,067 610
Cash flows from operations 20,926 20,861
Net interest paid (685) (612)
Dividends paid to holders of non-controlling interests in subsidiaries (477) (462)
Tax paid (4,165) (4,627)
Net cash generated from operating activities 15,599 15,160
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets((b)) (9,621) (7,086)
Sales of property, plant and equipment and intangible assets 30 9
Acquisitions of subsidiaries, joint ventures and associates((b)) (346) (834)
Disposals of subsidiaries, joint ventures, joint operations and associates 427 -
Purchases of financial assets (113) (39)
Sales of financial assets((c)) 677 1,220
Net funding of equity accounted units((b)) (784) (144)
Other investing cash flows 136 (88)
Net cash used in investing activities (9,594) (6,962)
Cash flows before financing activities 6,005 8,198
Cash flows from financing activities
Equity dividends paid to owners of Rio Tinto (7,025) (6,470)
Proceeds from additional borrowings, net of issue costs 261 1,833
Repayment of borrowings and associated derivatives (860) (310)
Lease principal payments (455) (426)
Proceeds from issue of equity to non-controlling interests((b)) 1,574 127
Purchase of non-controlling interest (591) (33)
Other financing cash flows 2 2
Net cash used in financing activities (7,094) (5,277)
Effects of exchange rates on cash and cash equivalents (99) (23)
Net (decrease)/increase in cash and cash equivalents (1,188) 2,898
Opening cash and cash equivalents less overdrafts 9,672 6,774
Closing cash and cash equivalents less overdrafts 8,484 9,672
(a) Cash flows from consolidated operations 2024 2023
US$m US$m
Profit after tax for the year 11,574 9,953
Adjustments for:
- Taxation 4,041 3,832
- Finance items 876 1,713
- Share of profit after tax of equity accounted units (838) (675)
- Gains on consolidation and disposal of interests in businesses (1,214) -
- Impairment charges net of reversals 538 936
- Depreciation and amortisation 5,918 5,334
- Provisions (including exchange differences on provisions) 398 1,470
Utilisation of other provisions (94) (104)
Utilisation of provisions for close-down and restoration (1,142) (777)
Utilisation of provisions for post-retirement benefits and other employment (133) (277)
costs
Change in inventories 205 (422)
Change in receivables and other assets (202) (418)
Change in trade and other payables 54 (86)
Other items((d)) (122) (228)
19,859 20,251
Consolidated cash flow statement (continued)
(b) In 2024, our net cash outflow in relation to the Simandou iron ore
project was US$1.3 billion. This includes cash outflows of US$1,831 million
for purchase of property, plant and equipment, US$313 million as acquisition
of associates for WCS Rail and Port, and US$652 million as net funding of
equity accounted units for the subsequent funding of that shared
infrastructure. We received related cash inflows of US$1,505 million from
Chalco Iron Ore Holdings Ltd (CIOH) for cash calls by SimFerJersey Limited, of
which US$411 million relates to CIOH's share of expenditure incurred up until
the end of December 2023 to progress critical works.
(c) In 2024, we received net proceeds of US$675 million (2023: US$1,157
million) from our sales and purchases of investments within a separately
managed portfolio of fixed income instruments. Purchases and sales of these
securities are reported on a net cash flow basis within "Sales of financial
assets" or "Purchases of financial assets" depending on the overall net
position at each reporting date.
(d) In 2024 Other items includes the recognition of realised losses of
US$88 million on currency forwards not designated as hedges (2023: realised
losses US$57 million).
Consolidated balance sheet
2023
2024 US$m
US$m
Non-current assets
Goodwill 727 797
Intangible assets 2,804 4,389
Property, plant and equipment 68,573 66,468
Investments in equity accounted units 4,837 4,407
Inventories 222 214
Deferred tax assets 4,016 3,624
Receivables and other assets 1,397 1,659
Other financial assets 1,090 481
83,666 82,039
Current assets
Inventories 5,860 6,659
Receivables and other assets 4,241 3,945
Tax recoverable 105 115
Other financial assets 419 1,118
Cash and cash equivalents 8,495 9,673
19,120 21,510
Total assets 102,786 103,549
Current liabilities
Borrowings (180) (824)
Leases (354) (345)
Other financial liabilities (112) (273)
Trade and other payables (8,178) (8,238)
Tax payable (585) (542)
Close-down, restoration and environmental provisions (1,183) (1,523)
Provisions for post-retirement benefits and other employment costs (359) (361)
Other provisions (792) (637)
(11,743) (12,743)
Non-current liabilities
Borrowings (12,262) (12,177)
Leases (1,059) (1,006)
Other financial liabilities (591) (513)
Trade and other payables (543) (596)
Tax payable (28) (31)
Deferred tax liabilities (2,635) (2,584)
Close-down, restoration and environmental provisions (14,548) (15,627)
Provisions for post-retirement benefits and other employment costs (1,097) (1,197)
Other provisions (315) (734)
(33,078) (34,465)
Total liabilities (44,821) (47,208)
Net assets 57,965 56,341
Capital and reserves
Share capital((a))
- Rio Tinto plc 207 207
- Rio Tinto Limited 3,060 3,377
Share premium account 4,326 4,324
Other reserves 5,114 8,328
Retained earnings 42,539 38,350
Equity attributable to owners of Rio Tinto 55,246 54,586
Attributable to non-controlling interests 2,719 1,755
Total equity 57,965 56,341
(a) At 31 December 2024, Rio Tinto plc had 1,252.9 million ordinary
shares in issue and held by the public, and Rio Tinto Limited had 371.2
million shares in issue and held by the public. There were no cross holdings
of shares between Rio Tinto Limited and Rio Tinto plc in either period
presented. As required to be disclosed under the ASX Listing Rules, the net
tangible assets per share amounted to US$31.84 (31 December 2023: US$30.45).
Consolidated statement of changes in equity
Year ended 31 December 2024 Attributable to owners of Rio Tinto
Share capital Share premium Other reserves Retained earnings Total Non-controlling Total
US$m account US$m US$m US$m interests equity
US$m US$m US$m
Opening balance 3,584 4,324 8,328 38,350 54,586 1,755 56,341
Total comprehensive income for the year((a)) - - (3,242) 11,617 8,375 (175) 8,200
Currency translation arising on Rio Tinto Limited's share capital (317) - - - (317) - (317)
Dividends((b)) - - - (7,025) (7,025) (528) (7,553)
Newly consolidated operation - - - - - 5 5
Own shares purchased from Rio Tinto shareholders to satisfy share awards to - - (44) (13) (57) - (57)
employees((c))
Change in equity interest held by Rio Tinto - - - (468) (468) 88 (380)
Treasury shares reissued and other movements - 2 - - 2 - 2
Equity issued to holders of non-controlling interests - - - - - 1,574 1,574
Employee share awards charged to the income statement - - 72 78 150 - 150
Closing balance 3,267 4,326 5,114 42,539 55,246 2,719 57,965
Year ended 31 December 2023 Attributable to owners of Rio Tinto
Share capital Share premium Other reserves Retained earnings Total Non-controlling Total
US$m account US$m US$m US$m interests equity
US$m US$m US$m
Opening balance 3,537 4,322 7,755 35,020 50,634 2,107 52,741
Total comprehensive income for the year((a)) - - 585 9,750 10,335 (63) 10,272
Currency translation arising on Rio Tinto Limited's share capital 47 - - - 47 - 47
Dividends((b)) - - - (6,466) (6,466) (462) (6,928)
Newly consolidated operation - - - - - 33 33
Own shares purchased from Rio Tinto shareholders to satisfy share awards to - - (78) (17) (95) - (95)
employees((c))
Change in equity interest held by Rio Tinto - - - (13) (13) 13 -
Treasury shares reissued and other movements - 2 - - 2 - 2
Equity issued to holders of non-controlling interests - - - - - 127 127
Employee share awards charged to the income statement - - 66 76 142 - 142
Closing balance 3,584 4,324 8,328 38,350 54,586 1,755 56,341
Consolidated statement of changes in equity (continued)
(a) Refer to the Consolidated statement of comprehensive income for
further details. Adjustments to other reserves include currency translation
attributable to owners of Rio Tinto, other than that arising on Rio Tinto
Limited's share capital.
(b) Dividends per share announced or paid during the period are
summarised below:
Year ended 31 December 2024 2023
US$ US$
Dividends per share: Ordinary - paid during the year 435.0c 402.0c
Ordinary dividends per share: announced with the results for the year 225.0c 258.0c
(c) Net of contributions received from employees for share awards.
Status of financial information
The full year financial information contained in this announcement, which does
not constitute statutory accounts as defined in Section 434 of the Companies
Act 2006, has been derived from the statutory accounts for the year ended
31 December 2024. These statutory accounts have been audited, were approved
by the Board on 19 February 2025, and will be filed with the Registrar of
Companies in the United Kingdom and the Australian Securities and Investments
Commission in due course. Statutory accounts for the year ended 31 December
2023 have been filed with the Registrar of Companies.
Unless stated otherwise, financial information for the years ended
31 December 2024 and 31 December 2023 has been extracted from the full
financial statements for that year prepared under the historical cost
convention, as modified by the revaluation of certain derivative contracts,
the impact of fair value hedge accounting on the hedged items and the
accounting for post-retirement assets and obligations.
The Auditors' reports on the full financial statements for the years ended
31 December 2024 and 31 December 2023 were both unqualified and, in relation
to Rio Tinto plc, did not contain a statement under section 498 (2) (regarding
adequacy of accounting records and returns), or under section 498 (3)
(regarding provision of necessary information and explanations) of the United
Kingdom Companies Act 2006, and in relation to Rio Tinto Limited, contained a
statement that the financial report is in accordance with the Corporations Act
2001 as amended by the ASIC Order dated 11 July 2024.
Rio Tinto financial information by business unit
Segmental revenue((a)) for the year ended Underlying EBITDA((a)) Depreciation and amortisation for the year ended Underlying earnings((a)) for the year ended
31 December for the year ended 31 December 31 December
31 December
Rio Tinto 2024 2023 2024 2023 2024 2023 2024 2023
interest US$m US$m US$m US$m US$m US$m US$m US$m
% Adjusted((m)) Adjusted((m))
Iron Ore
Pilbara (b) 27,849 30,867 16,543 19,828 2,390 2,128 9,550 11,945
Dampier Salt 68.4% 412 422 117 120 23 21 46 49
Evaluation projects/other (c) 3,197 2,701 (478) 57 - - (550) (89)
Intra-segment (c) (2,119) (1,741) 67 (31) - - 51 (23)
Total Iron Ore segment 29,339 32,249 16,249 19,974 2,413 2,149 9,097 11,882
Aluminium
Bauxite (d) 3,061 2,390 1,250 662 365 373 579 141
Alumina (e) 3,612 2,882 799 136 142 170 417 (56)
North American Aluminium (f) 7,030 6,581 1,639 1,480 785 710 632 566
Pacific Aluminium (g) 2,844 2,613 363 169 154 165 131 18
Intra-segment and other (3,651) (2,953) (194) (11) - - (136) (15)
Integrated operations 12,896 11,513 3,857 2,436 1,446 1,418 1,623 654
Other product group items 754 772 35 9 - - 23 5
Product group operations 13,650 12,285 3,892 2,445 1,446 1,418 1,646 659
Evaluation projects/other - - (219) (163) - - (163) (121)
Total Aluminium segment 13,650 12,285 3,673 2,282 1,446 1,418 1,483 538
Copper
Kennecott 100% 2,599 1,430 720 178 718 500 (54) (328)
Escondida 30% 3,424 2,756 2,221 1,619 426 355 921 684
Oyu Tolgoi (h) 2,184 1,625 1,105 639 473 476 388 161
Product group operations 8,207 5,811 4,046 2,436 1,617 1,331 1,255 517
Evaluation projects/other (m) 1,068 867 (609) (476) 3 5 (444) (327)
Total Copper segment 9,275 6,678 3,437 1,960 1,620 1,336 811 190
Minerals
Iron Ore Company of Canada 58.7% 2,450 2,500 746 942 229 214 212 293
Rio Tinto Iron & Titanium (i) 1,993 2,172 609 582 226 222 241 221
Rio Tinto Borates 100% 763 802 183 212 65 58 82 125
Diamonds (j) 279 444 (115) 44 29 35 (127) 26
Product group operations 5,485 5,918 1,423 1,780 549 529 408 665
Evaluation projects/other 46 16 (343) (366) 1 1 (265) (353)
Total Minerals segment 5,531 5,934 1,080 1,414 550 530 143 312
Reportable segments total 57,795 57,146 24,439 25,630 6,029 5,433 11,534 12,922
Simandou iron ore project (k) - - (22) (539) 7 - (39) (160)
Other operations (l)(m) 120 142 43 (95) 320 290 (225) (307)
Inter-segment transactions (c) (209) (231) 9 8 4 4
Central pension costs, share-based payments, insurance and derivatives 153 168 228 48
Restructuring, project and one-off costs (254) (190) (178) (112)
Central costs (816) (990) 121 95 (636) (898)
Central exploration and evaluation (238) (100) (216) (60)
Net interest 395 318
Underlying EBITDA/earnings 23,314 23,892 10,867 11,755
Items excluded from underlying EBITDA/earnings 1,055 (1,257) 685 (1,697)
Reconciliation to consolidated income statement
Share of EAUs sales and inter-subsidiary/EAUs sales (4,048) (3,016)
Impairment charges net of reversals (n) (573) (936)
Depreciation and amortisation in subsidiaries excluding capitalised (5,744) (4,976)
depreciation
Depreciation and amortisation in EAUs (559) (484) (559) (484)
Taxation and finance items in EAUs (1,002) (741)
Finance items (876) (1,713)
Consolidated sales revenue/profit before taxation/depreciation and 53,658 54,041 15,615 13,785 5,918 5,334 11,552 10,058
amortisation/net earnings
Rio Tinto financial information by business unit (continued)
Capital expenditure((o)) Operating assets((p))
for the year ended 31 December as at
Rio Tinto
interest 2024 2024 2023
% US$m 2023 US$m US$m
US$m Adjusted((m))
Iron Ore
Pilbara (b) 2,985 2,563 17,016 17,959
Dampier Salt 68.4% 27 25 5 146
Evaluation projects/other (c) - - 718 780
Intra-segment (c) - - (193) (243)
Total Iron Ore segment 3,012 2,588 17,546 18,642
Aluminium
Bauxite (d) 159 159 2,289 2,649
Alumina (e) 279 325 804 1,315
North American Aluminium (f) 1,153 748 10,516 10,582
Pacific Aluminium (g) 102 99 706 340
Intra-segment and other 1 - 795 997
Total Aluminium segment 1,694 1,331 15,110 15,883
Copper
Kennecott 100% 774 735 2,391 2,606
Escondida 30% - - 2,779 2,844
Oyu Tolgoi (h) 1,277 1,230 16,692 15,334
Product group operations 2,051 1,965 21,862 20,784
Evaluation projects/other (m) 4 11 262 266
Total Copper segment 2,055 1,976 22,124 21,050
Minerals
Iron Ore Company of Canada 58.7% 291 364 1,240 1,347
Rio Tinto Iron & Titanium (i) 244 240 3,215 3,386
Rio Tinto Borates 100% 57 49 475 502
Diamonds (j) 48 66 (38) 29
Product group operations 640 719 4,892 5,264
Evaluation projects/other 158 27 1,138 873
Total Minerals segment 798 746 6,030 6,137
Reportable segments total 7,559 6,641 60,810 61,712
Simandou iron ore project (k) 1,832 266 2,106 738
Other operations (l)(m) 66 57 (1,446) (2,638)
Inter-segment transactions (c) 22 20
Other items 134 113 (755) (1,015)
Total 9,591 7,077 60,737 58,817
Add back: Proceeds from disposal of property, plant and equipment 30 9
Total purchases of property, plant & equipment and intangibles as per cash 9,621 7,086
flow statement
Add: Net debt (5,491) (4,231)
Equity attributable to owners of Rio Tinto 55,246 54,586
Notes to financial information by business unit
Business units are classified according to the Group's management structure.
Our management structure is based on product groups together with global
support functions whose leaders make up the Executive Committee. The Executive
Committee members each report directly to our Chief Executive who is the chief
operating decision maker and is responsible for allocating resources and
assessing performance of the operating segments. Finance costs and net debt
are managed on a Group-wide basis and are therefore excluded from the
segmental results.
The disclosures in this note include certain alternative performance measures
(non-IFRS measures). For more information on the non-IFRS measures used by the
Group, including definitions and calculations, refer to section entitled
alternative performance measures (pages 37 to 46).
a. Segmental revenue is defined within Alternative performance measures
section on page 37. Underlying EBITDA is defined and calculated within the
Alternative performance measures section on pages 37 to 39. Underlying
earnings is defined and calculated within the Alternative performance measures
section on pages 40 to 41.
b. Pilbara represents the Group's 100% holding in Hamersley, 50% holding
in Hope Downs Joint Venture, 54% holding in Western Range Joint Venture and
65% holding in Robe River Iron Associates. The Group's net beneficial interest
in Robe River Iron Associates is 53.0%, as 30% is held through a 60.0% owned
subsidiary and 35% is held through a 100% owned subsidiary.
c. Segmental revenue, Underlying EBITDA, Underlying earnings and Operating
assets within Evaluation projects/other include activities relating to the
shipment and blending of Pilbara and Iron Ore Company of Canada (IOC) iron ore
inventories held portside in China and sold to domestic customers.
Transactions between Pilbara and our portside trading business are eliminated
through the Iron Ore "intra-segment" line and transactions between IOC and the
portside trading business are eliminated through "inter-segment transactions".
d. Bauxite represents the Group's 100% interest in Gove and Weipa, 22%
interest in Porto Trombetas and 22.9% interest in Sangarédi.
e. Alumina represents the Group's 100% interest in Jonquière (Vaudreuil),
Yarwun, 80% interest in Queensland Alumina and 10% interest in São Luis
(Alumar).
f. North American Aluminium represents the Group's 100% interest in
Alma, Arvida, Arvida AP60, Grande-Baie, ISAL, Kitimat, Laterrière, 40%
interest in Alouette, 25.1% interest in Bécancour, 20% interest in Sohar and
50% interest in Matalco.
g. Pacific Aluminium represents the Group's 100% interest in Bell Bay,
73.5% interest in Boyne Island, 100% interest in Tiwai Point and 51.6%
interest in Tomago. On 30 September 2024, our interest in Boyne Island was
increased from 59.4% to 71.05% following our acquisition of Mitsubishi
Corporation's 11.65% interest in Boyne Smelters Limited (BSL). On 1 November
2024, our interest was further increased to 73.5% following our acquisition of
Sumitomo Chemical Company's (SCC) 2.46% interest in BSL. On 1 November 2024,
we also acquired SCC's 20.64% interest in New Zealand Aluminium Smelters,
increasing our interest from 79.36% to 100%.
h. Oyu Tolgoi represents the Group's 66% investment in Oyu Tolgoi LLC.
i. Includes our interests in Rio Tinto Iron and Titanium Quebec
Operations (100%), QIT Madagascar Minerals (QMM, economic interest of 85%) and
Richards Bay Minerals (attributable interest of 74%).
j. Relates to our 100% interest in the Diavik diamond mine and diamond
marketing operations.
k. Rio Tinto SimFer UK Limited (which is wholly owned by the Group) holds
a 53% interest in SimFer Jersey Limited (SimFer Jersey) which in turn, has an
85% interest in SimFer S.A., the company that will carry out the Simandou
mining operations in Guinea, and an 85% interest in the company which will
deliver SimFer Jersey's scope of the co-developed rail and port
infrastructure. SimFer Jersey at present has a 100% interest in the companies
that will own and operate the transhipment vessels, however this is
anticipated to reduce to 85% with the Government of Guinea taking a 15%
interest before operations commence. These entities, together with the equity
accounted WCS Rail and Port entities (refer to Note 32 of the Financial
Statements to our 2024 Annual Report), are referred to as the Simandou iron
ore project.
l. Other operations includes our 98.43% interest in Energy Resources of
Australia (increased from 86.3% in November 2024 - refer to note 30 of the
Financial Statements to our 2024 Annual Report), sites being rehabilitated
under the management of Rio Tinto Closure, Rio Tinto Marine, and the remaining
legacy liabilities of Rio Tinto Coal Australia. These include provisions for
onerous contracts, in relation to rail infrastructure capacity, partly offset
by financial assets and receivables relating to contingent royalties and
disposal proceeds.
m. Accountability for Rio Tinto Guinea, our in-country external affairs
office remains with Bold Baatar, and has therefore moved from the Copper
product group to "Other operations" following his change in role to Chief
Commercial Officer. Accordingly, prior period amounts have been adjusted for
comparability even though there is no material impact as a result of the
change.
n. Refer to note 4 to the Financial Statements of our 2024 Annual Report
for allocation of impairment charges net of reversals between consolidated
amounts and share of profit in EAUs.
o. Capital expenditure is the net cash outflow on purchases less sales of
property, plant and equipment, capitalised evaluation costs and purchases less
sales of other intangible assets as derived from the consolidated cash flow
statement. The details provided include 100% of subsidiaries' capital
expenditure and Rio Tinto's share of the capital expenditure of joint
operations but exclude equity accounted units.
p. Operating assets of the Group represents equity attributable to Rio
Tinto adjusted for net debt. Operating assets of subsidiaries, joint
operations and the Group's share relating to equity accounted units are made
up of net assets adjusted for net debt and post-retirement assets and
liabilities, net of tax. Operating assets are stated after the deduction of
non-controlling interests; these are calculated by reference to the net assets
of the relevant companies (ie inclusive of such companies' debt and amounts
due to or from Rio Tinto Group companies).
Alternative performance measures
The Group presents certain alternative performance measures (non-IFRS
measures) which are reconciled to directly comparable IFRS financial measures
below. These non-IFRS measures, hereinafter referred to as alternative
performance measures (APMs), are used by management to assess the performance
of the business and provide additional information, which investors may find
useful. APMs are presented in order to give further insight into the
underlying business performance of the Group's operations.
APMs are not consistently defined and calculated by all companies, including
those in the Group's industry. Accordingly, these measures used by the Group
may not be comparable with similarly titled measures and disclosures made by
other companies. Consequently, these APMs should not be regarded as a
substitute for the IFRS measures and should be considered supplementary to
those measures.
The following tables present the Group's key financial measures not defined
according to IFRS and a reconciliation between those APMs and their nearest
respective IFRS measures.
APMs derived from the income statement
The following income statement measures are used by the Group to provide
greater understanding of the underlying business performance of its operations
and to enhance comparability of reporting periods. They indicate the
underlying commercial and operating performance of our assets including
revenue generation, productivity and cost management.
Segmental revenue
Segmental revenue includes consolidated sales revenue plus the equivalent
sales revenue of equity accounted units (EAUs) in proportion to our equity
interest (after adjusting for sales to/from subsidiaries).
Underlying EBITDA
Underlying EBITDA represents profit before taxation, net finance items,
depreciation and amortisation adjusted to exclude the EBITDA impact of items
which do not reflect the underlying performance of our reportable segments.
Reconciliation of profit after tax to underlying EBITDA
Items excluded from profit after tax are those gains and losses that,
individually or in aggregate with similar items, are of a nature and size to
require exclusion in order to provide additional insight into the underlying
business performance.
The following items are excluded from profit after tax in arriving at
underlying EBITDA in each year irrespective of materiality:
- all depreciation and amortisation in subsidiaries and the
corresponding share of profit in EAUs
- all taxation and finance items in subsidiaries and the corresponding
share of profit in EAUs
- unrealised (gains)/losses on embedded derivatives not qualifying for
hedge accounting (including foreign exchange)
- net (gains)/losses on consolidation or disposal of interests in
businesses
- impairment charges net of reversals including corresponding amounts in
share of profit in EAUs
- the underlying EBITDA of discontinued operations
- adjustments to closure provisions where the adjustment is associated
with an impairment charge and for legacy sites where the disturbance or
environmental contamination relates to the pre-acquisition period.
Alternative performance measures (continued)
In addition, there is a final judgemental category which includes, where
applicable, other credits and charges that, individually or in aggregate if of
a similar type, are of a nature or size to require exclusion in order to
provide additional insight into underlying business performance. In 2023, this
included all re-estimates of the closure provisions for fully impaired sites
identified in the second half of the year due to the materiality of the
adjustment in aggregate. There were no similar items in 2024.
Year ended 31 December 2024 2023
US$m US$m
Profit after tax for the period 11,574 9,953
Taxation 4,041 3,832
Profit before taxation 15,615 13,785
Depreciation and amortisation in subsidiaries, excluding capitalised 5,744 4,976
depreciation((a))
Depreciation and amortisation in equity accounted units 559 484
Finance items in subsidiaries 876 1,713
Taxation and finance items in equity accounted units 1,002 741
Unrealised losses/(gains) on embedded commodity and currency derivatives not 73 (15)
qualifying for hedge accounting (including foreign exchange)
Gains on consolidation and disposal of interests in businesses((b)) (1,214) -
Impairment charges net of reversals((c)) 573 936
Change in closure estimates (non-operating and fully impaired sites)((d)) 86 1,272
Underlying EBITDA 23,314 23,892
(a) Depreciation and amortisation in subsidiaries for the year ended
31 December 2024 is net of capitalised depreciation of US$174 million
(31 December 2023: US$358 million).
(b) Gains on consolidation of businesses include the revaluation of our
previously held interest in the NZAS joint operation as we acquired the
remaining shares during the year and this became a subsidiary. Disposals
include the sale of Wyoming Uranium and Lake MacLeod as described in note 5 to
the Financial Statements of our 2024 Annual Report.
(c) Detailed information about impairment charges net of reversals is
disclosed in note 4 to the Financial Statements of our 2024 Annual Report.
(d) In 2024, the charge to the income statement relates to the change in
estimates of underlying closure cash flows, net of impact of a change in
discount rate, expressed in real-terms, from 2.0% to 2.5% as applied to
provisions for close-down, restoration and environmental liabilities at legacy
sites where the environmental damage preceded ownership by Rio Tinto. US$873
million related to the closure provision update announced by ERA on 12
December 2023, together with the update included in their half year results
for the period ended 30 June 2023, published in August 2023. This update was
considered material and therefore it was aggregated with other closure study
updates which were similar in nature and have been excluded from underlying
EBITDA. The other closure study updates were at legacy sites managed by our
central closure team as well as an update at Yarwun alumina refinery which was
expensed due to the impairment earlier in the year.
Underlying EBITDA margin
Underlying EBITDA margin is defined as Group underlying EBITDA divided by the
aggregate of consolidated sales revenue and our share of equity account unit
sales after eliminations.
Year ended 31 December 2024 2023
US$m US$m
Underlying EBITDA 23,314 23,892
Consolidated sales revenue 53,658 54,041
Share of equity accounted unit sales and inter-subsidiary/equity accounted 4,048 3,016
unit sales eliminations
57,706 57,057
Underlying EBITDA margin 40 % 42 %
Alternative performance measures (continued)
Pilbara underlying FOB EBITDA margin
The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara
underlying EBITDA divided by Pilbara segmental revenue, excluding freight
revenue.
Year ended 31 December 2024 2023
US$m US$m
Pilbara
Underlying EBITDA 16,543 19,828
Pilbara segmental revenue 27,849 30,867
Less: Freight revenue (2,344) (2,098)
Pilbara segmental revenue, excluding freight revenue 25,505 28,769
Pilbara underlying FOB EBITDA margin 65 % 69 %
Underlying EBITDA margin from Aluminium integrated operations
Underlying EBITDA margin from Aluminium integrated operations is defined as
underlying EBITDA divided by segmental revenue.
Year ended 31 December 2024 2023
US$m US$m
Aluminium
Underlying EBITDA - integrated operations 3,857 2,436
Segmental revenue - integrated operations 12,896 11,513
Underlying EBITDA margin from integrated operations 30 % 21 %
Underlying EBITDA margin (product group operations)
Underlying EBITDA margin (product group operations) is defined as underlying
EBITDA divided by segmental revenue.
Year ended 31 December 2024 2023
US$m US$m
Copper
Underlying EBITDA - product group operations 4,046 2,436
Segmental revenue - product group operations 8,207 5,811
Underlying EBITDA margin - product group operations 49 % 42 %
Year ended 31 December 2023
2024 US$m
US$m
Minerals
Underlying EBITDA - product group operations 1,423 1,780
Segmental revenue - product group operations 5,485 5,918
Underlying EBITDA margin - product group operations 26 % 30 %
Alternative performance measures (continued)
Underlying earnings
Underlying earnings represents net earnings attributable to the owners of Rio
Tinto, adjusted to exclude items that do not reflect the underlying
performance of the Group's operations.
Exclusions from underlying earnings are those gains and losses that,
individually or in aggregate with similar items, are of a nature and size to
require exclusion in order to provide additional insight into underlying
business performance.
The following items are excluded from net earnings in arriving at underlying
earnings in each period irrespective of materiality:
• net (gains)/losses on consolidation or disposal of interests in
businesses
• impairment charges and reversals
• (profit)/loss after tax from discontinued operations
• exchange and derivative gains and losses. This adjustment includes
exchange (gains)/losses on external net debt and intragroup balances,
unrealised (gains)/losses on currency and interest rate derivatives not
qualifying for hedge accounting, unrealised (gains)/losses on certain
commodity derivatives not qualifying for hedge accounting, and unrealised
(gains)/losses on embedded derivatives not qualifying for hedge accounting
• adjustments to closure provisions where the adjustment is
associated with an impairment charge, or for legacy sites where the
disturbance or environmental contamination relates to the pre-acquisition
period.
In addition, there is a final judgemental category which includes, where
applicable, other credits and charges that, individually or in aggregate if of
a similar type, are of a nature or size to require exclusion in order to
provide additional insight into underlying business performance. In 2024 this
includes provision for uncertain tax positions in relation to disputes with
the Mongolian Tax Authority and the recognition of deferred tax assets at
Energy Resources of Australia.
Exclusions from underlying earnings relating to equity accounted units are
stated after tax and included in the column "Pre-tax".
Alternative performance measures (continued)
Reconciliation of net earnings to underlying earnings
Pre-tax Taxation Non-controlling Net amount Net amount
2024 2024 interests 2024 2023
US$m US$m 2024 US$m US$m
US$m
Net earnings 15,615 (4,041) (22) 11,552 10,058
Items excluded from underlying earnings
(Gains)/losses on consolidation and disposal of interests in businesses((a)) (1,214) 274 43 (897) -
Impairment charges net of reversals((b)) 561 (27) - 534 652
Foreign exchange and derivative losses/(gains):
- Exchange (gains)/losses on external net debt, intragroup balances and (308) 13 2 (293) 243
derivatives((c))
- Losses on currency and interest rate derivatives not qualifying for hedge 68 2 4 74 87
accounting((d))
- Losses/(gains) on embedded commodity derivatives not qualifying for hedge 92 (27) - 65 (23)
accounting((e))
Change in closure estimates (non-operating and fully impaired sites)((f)) 86 (13) - 73 1,102
Uncertain tax provisions((g)) - 295 (100) 195 -
Recognition of deferred tax assets at Energy Resources of Australia((h)) - (443) 7 (436) -
Deferred tax arising on internal sale of assets in Canadian operations((i)) - - - - (364)
Total excluded from underlying earnings (715) 74 (44) (685) 1,697
Underlying earnings 14,900 (3,967) (66) 10,867 11,755
(a) Gains on consolidation of businesses include the revaluation of our
previously held interest in the NZAS joint operation as we acquired the
remaining shares during the year and this became a subsidiary. Disposals
include the sale of Wyoming Uranium and Lake MacLeod as described in note 5 to
the Financial Statements of our 2024 Annual Report.
(b) Detailed information about impairment charges is disclosed in note 4
to the Financial Statements of our 2024 Annual Report.
(c) Exchange (gains)/losses on external net debt, intragroup balances and
derivatives includes post-tax gains on intragroup balances of US$647 million
(2023: US$316 million loss) offset by post-tax losses on external net debt of
US$354 million (2023: US$73 million gain), primarily as a result of the
Australian dollar weakening against the US dollar.
(d) Valuation changes on currency and interest rate derivatives, which are
ineligible for hedge accounting, other than those embedded in commercial
contracts, and the currency revaluation of embedded US dollar derivatives
contained in contracts held by entities whose functional currency is not the
US dollar.
(e) Valuation changes on derivatives, embedded in commercial contracts
that are ineligible for hedge accounting but for which there will be an
offsetting change in future Group earnings. Mark-to-market movements on
commodity derivatives entered into with the commercial objective of achieving
spot pricing for the underlying transaction at the date of settlement are
included in underlying earnings. In 2024, the charge includes unrealised
losses recognised in relation to our renewable PPAs.
(f) In 2024, the charge to the income statement relates to the change in
estimates of underlying closure cash flows, net of impact of a change in
discount rate, expressed in real-terms, from 2.0% to 2.5% as applied to
provisions for close-down, restoration and environmental liabilities at legacy
sites where the environmental damage preceded ownership by Rio Tinto. In 2023,
the charge included US$0.9 billion related to the closure provision update
announced by Energy Resources of Australia on 12 December 2023 together with
the update included in their half year results for the period ended 30 June
2023, published in August 2023. This update was considered material and
therefore it was aggregated with other closure study updates which were
similar in nature and have been excluded from underlying earnings. The other
closure study updates were at legacy sites managed by our central closure team
as well as an update at Yarwun alumina refinery which was expensed due to the
impairment earlier in the year.
(g) The uncertain tax provision in 2024 represents amounts provided in
relation to disputes with the Mongolian Tax Authority for which the timing of
resolution and potential economic outflow are uncertain.
(h) Recognition of deferred tax assets at Energy Resources of Australia
(ERA) relates to rehabilitation provisions which are tax deductible when paid
in the future. In November 2024, our interest in ERA increased from 86.3% to
98.43% and Rio Tinto stated its intention to proceed with compulsory
acquisition of the remaining shares during 2025. Tax deductions for
rehabilitation payments made after completion of the compulsory acquisition
process will be applied against taxable profits from other Australian
operations, including our iron ore business.
(i) In 2023, the Canadian aluminium business completed an internal sale
of assets which resulted in the utilisation of previously unrecognised capital
losses and an uplift in the tax depreciable value of assets on which a
deferred tax asset of US$364 million was recognised.
Alternative performance measures (continued)
Basic underlying earnings per share
Basic underlying earnings per share is calculated as underlying earnings
divided by the weighted average number of shares outstanding during the year.
Year ended 31 December 2024 2023
(cents) (cents)
Basic earnings per ordinary share 711.7 620.3
Items excluded from underlying earnings per share((a)) (42.2) 104.7
Basic underlying earnings per ordinary share 669.5 725.0
(a) Calculation of items excluded from underlying earnings per share.
Year ended 31 December 2024 2023
Items excluded from underlying earnings (US$m) (refer to page 41) (685.0) 1,697.0
Weighted average number of shares (millions) 1,623.1 1,621.4
Items excluded from underlying earnings per share (cents) (42.2) 104.7
We have provided basic underlying earnings per share as this allows the
comparability of financial performance adjusted to exclude items which do not
reflect the underlying performance of the Group's operations.
Interest cover
Interest cover is a financial metric used to monitor our ability to service
debt. It represents the number of times finance income and finance costs
(including amounts capitalised) are covered by profit before taxation, before
finance income, finance costs, share of profit after tax of equity accounted
units and items excluded from underlying earnings, plus dividends from equity
accounted units.
Year ended 31 December 2024 2023
US$m US$m
Profit before taxation 15,615 13,785
Add back
Finance income (514) (536)
Finance costs 763 967
Share of profit after tax of equity accounted units (838) (675)
Items excluded from underlying earnings (715) 2,498
Add: Dividends from equity accounted units 1,067 610
Calculated earnings 15,378 16,649
Finance income 514 536
Finance costs (763) (967)
Add: Amounts capitalised (424) (279)
Total net finance costs before capitalisation (673) (710)
Interest cover 23 23
Alternative performance measures (continued)
Payout ratio
The payout ratio is used by us to guide the dividend policy we implemented in
2016, under which we have sought to return 40-60% of underlying earnings, on
average through the cycle, to shareholders as dividends. It is calculated as
total equity dividends per share to owners of Rio Tinto declared in respect of
the financial year divided by underlying earnings per share (as defined
above). Dividends declared usually include an interim dividend paid in the
year, and a final dividend paid after the end of the year. Any special
dividends declared in respect of the financial year are also included.
Year ended 31 December 2024 2023
(cents) (cents)
Interim dividend declared per share 177.0 177.0
Final dividend declared per share 225.0 258.0
Total dividend declared per share for the year 402.0 435.0
Underlying earnings per share 669.5 725.0
Payout ratio 60 % 60 %
APMs derived from cash flow statement
Capital expenditure
Capital expenditure includes the net sustaining and development expenditure on
property, plant and equipment, and on intangible assets. This is equivalent to
"Purchases of property, plant and equipment and intangible assets" in the cash
flow statement less "Sales of property, plant and equipment and intangible
assets".
This measure is used to support management's objective of effective and
efficient capital allocation as we need to invest in existing assets in order
to maintain and improve productive capacity, and in new assets to grow the
business.
Year ended 31 December 2024 2023
US$m US$m
Purchase of property, plant and equipment and intangible assets 9,621 7,086
Less: Sales of property, plant and equipment and intangible assets (30) (9)
Capital expenditure 9,591 7,077
Alternative performance measures (continued)
Rio Tinto share of capital investment
Rio Tinto's share of capital investment represents our economic investment in
capital projects. This measure was introduced in 2022 to better represent the
Group's share of funding for capital projects which are jointly funded with
other shareholders and which may differ from the consolidated basis included
in the Capital expenditure APM. This better reflects our approach to capital
allocation.
The measure is based upon purchase of property, plant and equipment and
intangible assets and adjusted to deduct equity or shareholder loan financing
provided to partially owned subsidiaries by non-controlling interests in
respect of major capital projects in the period. In circumstances where the
funding to be provided by non-controlling interests is not received in the
same period as the underlying capital investment, this adjustment is applied
in the period in which the underlying capital investment is made, not when the
funding is received. Where funding which would otherwise be provided directly
by shareholders is replaced with project financing, an adjustment is also made
to deduct the share of project financing attributable to the non-controlling
interest. This adjustment is not made in cases where Rio Tinto has
unilaterally guaranteed this project financing. Lastly, funding contributed by
the Group to Equity Accounted Units for its share of investment in their major
capital projects is added to the measure. No adjustment is made to the Capital
expenditure APM where capital expenditure is funded from the operating cash
flows of the subsidiary or EAU.
Year ended 31 December 2024 2023
US$m US$m
Purchase of property, plant and equipment and intangible assets 9,621 7,086
Funding provided by the group to EAUs((a)) 965 -
Less: Equity or shareholder loan financing received/due from non-controlling (1,063) (125)
interests((b))
Rio Tinto share of capital investment 9,523 6,961
(a) In 2024, funding provided by the group to EAUs relates to funding of
WCS rail and port entities (WCS) in relation to the Simandou project,
consisting of a direct equity investment in WCS of US$431 million and loans
provided totalling US$534 million.
(b) In 2024, we received US$1,505 million from Chalco Iron Ore Holdings
Ltd (CIOH), of which US$1,063 million relates to CIOH's 47% share of capital
expenditure incurred on the Simandou project and associated funding provided
by the Group to EAUs during the year, accounted for on an accrual basis.
Free cash flow
Free cash flow is defined as net cash generated from operating activities
minus purchases of property, plant and equipment and intangibles and payments
of lease principal, plus proceeds from the sale of property, plant and
equipment and intangible assets.
This measures the net cash returned by the business after the expenditure of
sustaining and development capital. This cash can be used for shareholder
returns, reducing debt and other investing/financing activities.
Year ended 31 December 2024 2023
US$m US$m
Net cash generated from operating activities 15,599 15,160
Less: Purchase of property, plant and equipment and intangible assets (9,621) (7,086)
Less: Lease principal payments (455) (426)
Add: Sales of property, plant and equipment and intangible assets 30 9
Free cash flow 5,553 7,657
Alternative performance measures (continued)
APMs derived from the balance sheet
Net debt
Net debt is total borrowings plus lease liabilities less cash and cash
equivalents and other liquid investments, adjusted for derivatives related to
net debt.
Net debt measures how we are managing our balance sheet and capital structure.
Year ended 31 December 2024
Financial liabilities Other assets
Borrowings Lease liabilities((b)) Derivatives related to net debt Cash and cash equivalents including overdrafts Other investments Net debt
US$m
excluding overdrafts US$m ((c)) ((a)) ((d))
((a)) US$m US$m US$m
US$m
At 1 January (13,000) (1,351) (429) 9,672 877 (4,231)
Foreign exchange adjustment 57 69 (30) (99) (1) (4)
Cash movements excluding exchange movements 494 455 104 (1,089) (675) (711)
Other non-cash movements 18 (586) 12 - 11 (545)
At 31 December (12,431) (1,413) (343) 8,484 212 (5,491)
(a) Borrowings excluding overdrafts of US$12,431 million (2023: US$13,000
million) differs from Borrowings on the balance sheet as it excludes bank
overdrafts of US$11 million (2023: US$1 million) which has been included in
cash and cash equivalents for the net debt reconciliation.
(b) Other non-cash movements in lease liabilities include the net impact
of additions, modifications and terminations during the period.
(c) Included within "Derivatives related to net debt" are interest rate
and cross-currency interest rate swaps that are in hedge relationships with
the Group's debt.
(d) Other investments includes US$212 million (2023: US$877 million) of
highly liquid financial assets held in a separately managed portfolio of fixed
income instruments classified as held for trading.
Net gearing ratio
Net gearing ratio is defined as net debt divided by the sum of net debt and
total equity at the end of each year. It demonstrates the degree to which the
Group's operations are funded by debt versus equity.
2024 2023
US$m US$m
Net debt 5,491 4,231
Net debt 5,491 4,231
Total equity 57,965 56,341
Net debt plus total equity 63,456 60,572
Net gearing ratio 9% 7%
Alternative performance measures (continued)
Underlying return on capital employed
Underlying return on capital employed (ROCE) is defined as underlying earnings
excluding net interest divided by average capital employed (operating assets).
Underlying ROCE measures how efficiently we generate profits from investment
in our portfolio of assets.
Year ended 31 December 2024 2023
US$m US$m
Profit after tax attributable to owners of Rio Tinto (net earnings) 11,552 10,058
Items added back to derive underlying earnings (685) 1,697
Underlying earnings 10,867 11,755
Add/(deduct):
Finance income per the income statement (514) (536)
Finance costs per the income statement 763 967
Tax on finance cost (208) (373)
Non-controlling interest share of net finance costs (496) (429)
Net interest cost in equity accounted units (Rio Tinto share) 60 53
Net interest (395) (318)
Adjusted underlying earnings 10,472 11,437
Equity attributable to owners of Rio Tinto - beginning of the year 54,586 50,634
Net debt - beginning of the year 4,231 4,188
Operating assets - beginning of the year 58,817 54,822
Equity attributable to owners of Rio Tinto - end of the year 55,246 54,586
Net debt - end of the year 5,491 4,231
Operating assets - end of the year 60,737 58,817
Average operating assets 59,777 56,820
Underlying return on capital employed 18 % 20 %
Metal prices and exchange rates
12 month average to 31 December 2024 12 month average to 31 December 2023 Increase/ (Decrease)
Metal prices - average for the period
Copper - US cents/lb 415 386 8 %
Aluminium - US$/tonne 2,419 2,250 8 %
Gold - US$/troy oz 2,386 1,941 23 %
Twelve month average to 31 December At 31 December
Exchange rates against the US dollar 2024 2023 Increase/ (Decrease) 2024 2023 Increase/ (Decrease)
Pound sterling 1.28 1.24 3 % 1.25 1.28 (2) %
Australian dollar 0.66 0.66 (1) % 0.62 0.69 (9) %
Canadian dollar 0.73 0.74 (1) % 0.70 0.76 (8) %
Euro 1.08 1.08 - % 1.04 1.11 (7) %
South African rand 0.055 0.054 1 % 0.053 0.054 (2) %
Forward-looking statements
This report includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements other than
statements of historical facts included in this report, including, without
limitation, those regarding Rio Tinto's financial position, business strategy,
plans and objectives of management for future operations (including
development plans and objectives relating to Rio Tinto's products, production
forecasts and reserve and resource positions), are forward-looking statements.
The words "intend", "aim", "project", "anticipate", "estimate", "plan",
"believes", "expects", "may", "should", "will", "target", "set to" or similar
expressions, commonly identify such forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Rio Tinto, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding Rio Tinto's present and future business
strategies and the environment in which Rio Tinto will operate in the future.
Among the important factors that could cause Rio Tinto's actual results,
performance or achievements to differ materially from those in the
forward-looking statements include, but are not limited to: an inability to
live up to Rio Tinto's values and any resultant damage to its reputation; the
impacts of geopolitics on trade and investment; the impacts of climate change
and the transition to a low-carbon future; an inability to successfully
execute and/or realise value from acquisitions and divestments; the level of
new ore resources, including the results of exploration programmes and/or
acquisitions; disruption to strategic partnerships that play a material role
in delivering growth, production, cash or market positioning; damage to Rio
Tinto's relationships with communities and governments; an inability to
attract and retain requisite skilled people; declines in commodity prices and
adverse exchange rate movements; an inability to raise sufficient funds for
capital investment; inadequate estimates of ore resources and reserves; delays
or overruns of large and complex projects; changes in tax regulation; safety
incidents or major hazard events; cyber breaches; physical impacts from
climate change; the impacts of water scarcity; natural disasters; an
inability to successfully manage the closure, reclamation and rehabilitation
of sites; the impacts of civil unrest; the impacts of the Covid-19 pandemic;
breaches of Rio Tinto's policies, standard and procedures, laws or
regulations; trade tensions between the world's major economies; increasing
societal and investor expectations, in particular with regard to
environmental, social and governance considerations; the impacts of
technological advancements; and such other risks identified in Rio Tinto's
most recent Annual Report and accounts in Australia and the United Kingdom and
the most recent Annual Report on Form 20-F filed with the United States
Securities and Exchange Commission (the "SEC") or Form 6-Ks furnished to, or
filed with, the SEC. Forward-looking statements should, therefore, be
construed in light of such risk factors and undue reliance should not be
placed on forward-looking statements. These forward-looking statements speak
only as of the date of this report. Rio Tinto expressly disclaims any
obligation or undertaking (except as required by applicable law, the UK
Listing Rules, the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority and the Listing Rules of the Australian Securities Exchange)
to release publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in Rio Tinto's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
Nothing in this report should be interpreted to mean that future earnings per
share of Rio Tinto plc or Rio Tinto Limited will necessarily match or exceed
its historical published earnings per share.
Contacts Please direct all enquiries to media.enquiries@riotinto.com
Media Relations, United Kingdom Media Relations, Australia Media Relations, Americas
David Outhwaite Matt Chambers Jesse Riseborough
M +44 7787 597 493 M +61 433 525 739 M +61 436 653 412
Michelle Lee Simon Letendre
M +1 514 796 4973
M + 61 458 609 322
Malika Cherry
M +1 418 592 7293
Rachel Pupazzoni
M +61 438 875 469 Vanessa Damha
M +1 514 715 2152
Investor Relations, United Kingdom Investor Relations, Australia
Rachel Arellano Tom Gallop
M +61 439 353 948
M +44 7584 609 644
Amar Jambaa
M +61 472 865 948
David Ovington
M +44 7920 010 978
Laura Brooks
M +44 7826 942 797
Weiwei Hu
M +44 7825 907 230
Rio Tinto plc Rio Tinto Limited
6 St James's Square Level 43, 120 Collins Street
London SW1Y 4AD
United Kingdom Melbourne 3000
T +44 20 7781 2000 Australia
Registered in England
No. 719885
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404
riotinto.com
This announcement is authorised for release to the market by Rio Tinto's Group
Company Secretary.
LEI: 213800YOEO5OQ72G2R82
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