Iron ore offsets Rio's challenging year for aluminium
A CHALLENGING aluminium market has marred Rio Tinto's best financial result in five years.
Booming iron ore prices delivered Rio Tinto's best half-year revenue and profit result since 2014 of $US4.93billion.
This was better than analysts had expected and 12 per cent higher than the 2018 half-year result.
But the aluminium and alumina business, which includes Gladstone operations Queensland Alumina Limited, Boyne Smelters Limited and Rio Tinto Yarwun, was hit by supply-chain challenges and low prices.
During the first half of 2019 the aluminium business's gross revenue was $5.1million compared to $6.14million the year prior.
"Our aluminium business was stable from an operational perspective but suffered from price declines, in particular in aluminium metal," the report said.
It said a weaker pricing environment was the main cause of the decline. Alumina production was 3 per cent lower than the 2018 first half, partly due to production disruptions during maintenance work at QAL.
Chief executive Jean-Sebastian Jacques said the overall result for Rio Tinto was strong, buoyed by iron ore prices that were 36 per cent higher than the same period in 2018.
"Our world-class portfolio and strong balance sheet serve us well in all market conditions," Mr Jacques said.
"This, together with our disciplined capital allocation, underpins our ability to continue to invest in our business."
The stronger than expected result allowed the company to spend $US1billion on a surprise special dividend of 61cents for shareholders.