This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ1L05A_L.jpg
Strict COVID-19 curbs in top steel producer China curtailed economic activity last year, pulling down iron ore prices from lofty levels scaled a year earlier.
The Anglo-American miner said China consumption showed signs of rebounding and commodity prices had found support in recent months, although the economy remained volatile.
Rio, however, lowered its capital investments guidance for 2023 to $8 billion from a prior estimate of between $8 billion and $9 billion. The capital investment estimates for 2024 and 2025 were hiked to between $9 billion and $10 billion.
On Tuesday, rival BHP Group (NYSE:BHP) reported a steeper-than-expected 32% fall in first-half profit owing to a drop in iron ore prices, but flagged a brightening outlook in China, its biggest customer.
Rio Tinto (NYSE:RIO) last year earned an average realised price of just $106.1 per dry metric tonne (dmt) of iron ore, compared with $143.8 per dmt in 2021.
Apart from higher wages due to skilled labour shortages, the Anglo-American miner had to pay more for fuel and raw materials.
The company, one of the world’s top iron ore producers, reported underlying earnings of $13.3 billion for 2022, compared with a record $21.4 billion in 2021 and missing a Refinitiv estimate of $13.8 billion.
Additional investments to ramp up production at the Gudai-Darri mine in Pilbara, along with higher diesel prices and labour costs, resulted in Pilbara unit cash costs rising to $21.3 per tonne in 2022, Rio said.
It declared a full-year dividend of $4.92 per share, down from 2021’s record payout of $10.40 per share, and maintained its production and unit cost guidance for 2023.
