31 July 2024

Consistent, stable financial performance as we ramp up our investments in growth; underlying EBITDA of $12.1 billion and interim ordinary dividend of 177 US cents per share

•     Underlying EBITDA of $12.1 billion. Net cash generated from operating activities of $7.1 billion.

•     Profit after tax attributable to owners of Rio Tinto (referred to as "net earnings" throughout this release) of $5.8 billion.

•     Underlying earnings of $5.8 billion, leading to an interim ordinary dividend of $2.9 billion, a 50% payout.

Six months ended 30 June	2024	2023	Change
Net cash generated from operating activities (US$ millions)	7,056	6,975	1  %
Purchases of property, plant and equipment and intangible assets (US$ millions)	4,018	3,001	34    %
Free cash flow¹ (US$ millions)	2,843	3,769	(25)      %
Consolidated sales revenue (US$ millions)	26,802	26,667	1  %
Underlying EBITDA¹ (US$ millions)	12,093	11,728	3  %
Profit after tax attributable to owners of Rio Tinto (net earnings) (US$ millions)	5,808	5,117	14    %
Underlying earnings per share (EPS)¹ (US cents)	354.3	352.9	-    %
Ordinary dividend per share (US cents)	177.0	177.0	-    %
Underlying return on capital employed (ROCE)¹	19%	20%
	At 30 June 2024	At 31 December 2023
Net debt¹ (US$ millions)	5,077	4,231	20    %

Rio Tinto Chief Executive Jakob Stausholm said: "Rio Tinto is both consistently very profitable and growing. This is being driven by the disciplined investments we are making to strengthen our operations and progress major projects for profitable organic growth.

"Our overall copper equivalent production is on track to grow by around 2% this year, and our ambition is to deliver around 3% of compound annual growth from 2024 to 2028 from existing operations and projects.

"We are at an inflection point in our growth, with a step change from our aluminium business and consistent production at our Pilbara iron ore operations. We have considerable growth in cash flow from the ramp-up of the underground copper mine at Oyu Tolgoi, and more value to come as our Simandou investment and Rincon lithium project proceed at pace. We are also solving some of our most complex challenges through technology and partnerships, such as the renewable power solutions announced for Boyne and NZAS. 

"Our strengthened operations along with stable pricing for our commodities have allowed us to again deliver robust financial results, with underlying EBITDA of $12.1 billion. We recorded free cash flow of $2.8 billion, as we invested in growth, and underlying earnings of $5.8 billion, after taxes and government royalties of $4.4 billion. Return on capital employed was a healthy 19%.

"Our strong balance sheet enables us to continue to maintain our practice of a 50% interim payout with a $2.9 billion ordinary dividend, as we continue to invest with discipline to shape Rio Tinto into an even stronger company."  

 

 

 

 

 

 

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 62 to 69. Our financial results are prepared in accordance with IFRS - see page 34 for further information.

Progress against our four objectives

Objective	Key achievements in the first half of 2024
Best operator	Safety is our top priority. Tragically four colleagues and two airline crew members died in a plane crash while travelling to our Diavik diamond mine in Canada in January 2024. The investigation by the authorities is ongoing. Our team is committed to continuing our safety improvement journey by learning from these events. This remains imperative throughout 2024. Our disciplined investment in lifting the health of our assets and focus on shifting our culture and mindset is delivering results: •     we are committed to having a safe work environment, preventing catastrophic events and injuries. Our All Injury Frequency Rate (AIFR) in the first half of 2024 remained stable at 0.36. •     we continue to see good performance from the Oyu Tolgoi underground mine in Mongolia, with a 15% increase in mined copper production compared with first half 2023. •     the deployment of the Safe Production System (SPS) has now reached 26 sites. We deepened the maturity of SPS at existing sites during the half, with three additional sites setting best throughput rates (over a 90 day period). •     we achieved a 10% increase in bauxite production compared with first half 2023, which reflects implementation of SPS, especially at Weipa where we achieved higher plant utilisation and feed rates. •     we are on track to deliver our targeted 5 million tonne production uplift at Pilbara Iron Ore in 2024 from SPS, which follows the 5 million tonne achieved in 2023.
Impeccable ESG	We have committed to reaching net zero Scope 1 and 2 emissions by 2050 and set ambitious interim targets relative to our 2018 equity emissions baseline: to reduce greenhouse gas (GHG) emissions by 50% by 2030. In 2024 first half, our Scope 1 and 2 emissions were 16.1Mt CO2e (16.3Mt in 2023 first half, restated to reflect market-based Scope 2 reporting and current asset ownership; 32.6Mt in 2023). Our capital expenditure on decarbonisation projects in 2024 first half was $69 million. We also made $46 million of equity investments related to our decarbonisation programs. Our related operational expenditure was $96 million. Progress during the half on decarbonising our operations and value chains included: •     Rio Tinto announced drive to develop Australia's largest solar farm at Gladstone •     Australia's leading iron ore producers partner with BlueScope on steel decarbonisation •     Rio Tinto signs Australia's largest wind power deal as it works to repower its Gladstone operations •     Rio Tinto and BHP collaborate on battery-electric haul truck trials in the Pilbara •     Rio Tinto to develop BioIron™ R&D facility in Western Australia to test low-carbon steelmaking •     Long-term future for New Zealand's Tiwai Point aluminium smelter secured with new power deals •     Rio Tinto to install carbon free aluminium smelting cells using first ELYSIS technology licence •     Richards Bay Minerals signs agreement for an additional 140 MW of renewable energy •     Ngarluma and Rio Tinto to progress renewable energy project
Excel in Development	We made significant progress with our objective to excel in development with the following key milestones in the half: •     the ramp-up of the Oyu Tolgoi underground copper-gold mine in Mongolia is progressing in line with our long-term plan and is on track to reach 500 thousand tonnes1 of copper per year from 2028 to 2036. •     the construction of the Simandou high-grade iron ore project in Guinea is advancing at pace. All conditions for Rio Tinto's investment to develop the deposit were satisfied in July, including the completion of necessary Guinean and Chinese regulatory approvals, and we completed our investment to co-develop the rail and port infrastructure. •     development of the 3,000 tonne per annum lithium carbonate starter plant at Rincon in Argentina is on plan: we expect first production by the end of 2024. •     at the Serbian Critical Raw Materials Summit on 19 July, governments, potential customers and European leaders endorsed the Jadar lithium project. This followed the Government of Serbia's reinstatement of the Jadar project spatial plan to its previously adopted form.
Social licence	We continue to strive to restore trust and rebuild relationships, particularly with Indigenous peoples as we continue to invest in cultural knowledge. In March, we officially launched a global community perception monitoring program, Local Voices. The program is an important part of our commitment to truly listen to communities so we can continually find better ways to work together. Other key highlights in the half include: •     Sokhulu and RBM agree to implement trust reform and support long-term community benefit •     Rio Tinto commits $10 million to boost Tom Price sports and recreation •     Yinhawangka People and Rio Tinto partner to co-design 'Living Cultures Program' •     Rio Tinto celebrates WA businesses as regional and Indigenous supplier spend grows •     Rio Tinto donates $1.5 million to support the people and community of Grindavík in Iceland •     Rio Tinto invests $8 million in Pilbara conservation land management

 

People and culture

We increased our gender diversity to 25.0% (from 24.3% at year end). The increases were distributed across all levels of the organisation with female senior leaders increasing to 31.0% (from 30.1% at year end).

During the first half, we continued to work on the Everyday Respect recommendations. As part of this, we commenced our independently led Progress Review. The outcomes will enable us to understand where our actions have had the most impact and where we need to focus on our journey of culture change to continue to create a safe, respectful and inclusive organisation. We expect to receive the final report in the fourth quarter of 2024 and will subsequently make this publicly available. 

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.

 

Guidance

• Our share of capital investment (non-IFRS measure, refer to APMs on page 67) is unchanged. In 2024, 2025 and 2026 we expect it to be up to $10.0 billion per year, including up to $3.0 billion in growth per year, depending on opportunities. Each guidance year also includes sustaining capital of around $4.0 billion and $2.0 to $3.0 billion of replacement capital. Sustaining capital includes around $1.5 billion over the next three years on decarbonisation projects ($5 to $6 billion in total up to 2030). This remains subject to Traditional Owner and other stakeholder engagement, regulatory approvals and technology developments. All capital guidance is subject to ongoing inflationary pressures and exchange rates.

• In 2024, we expect our ongoing exploration and evaluation expense (excluding Simandou) to be around $1.0 billion. We have been capitalising all qualifying Simandou costs from the fourth quarter of 2023: our guidance assumes this continues.

• In the coming years, we expect to spend (on a cash basis) around $1 billion per year on closure activities as we advance our closure activities 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. In 2024, the cash spend is expected to be around $1.2 billion following a one-off investment in July to reduce our long-term exposure to a legacy site in France. All these amounts are fully provided for within our provision for closure costs of $15.9 billion, which has decreased by $1.3 billion since 2023 year end primarily due to a change in discount rate.

•  Effective tax rate on underlying earnings is expected to be around 30% in 2024.

Unit costs	H1 2024 Actuals	2024 Guidance
Pilbara iron ore unit cash costs, free on board (FOB) basis - US$ per wet metric tonne	23.2	21.75-23.50
Australian dollar exchange rate	0.66	0.66
Copper C1 unit costs (includes Kennecott, Oyu Tolgoi and Escondida) - US cents per lb	147	140-160

 

Production (Rio Tinto share, unless otherwise stated)	H1 2024 Actuals	2024 Guidance
Pilbara iron ore (shipments, 100% basis) (Mt)	158.3	323 to 338
Bauxite (Mt)	28.1	53 to 561
Alumina (Mt)	3.5	7.0 to 7.3
Aluminium (Mt)	1.7	3.2 to 3.4
Mined copper (consolidated basis) (kt)	327	660 to 7202
Refined copper (kt)	125	230 to 260
Titanium dioxide slag (Mt)	0.5	0.9 to 1.1
Iron Ore Company of Canada iron ore pellets and concentrate (Mt)	4.8	9.8 to 11.5
Boric oxide equivalent (Mt)	0.2	~0.5

1. Around the top end

2. Around the bottom end.

•  Production guidance is consistent with our Second Quarter Operations Review, released on 16 July 2024.

•  Iron ore shipments and bauxite production guidance remain subject to weather impacts.

•  Expectations for Pilbara iron ore shipments in 2024 remain at 323 to 338 million tonnes. SP10 levels are expected to remain elevated until replacement projects are delivered. This guidance remains subject to the timing of approvals for planned mining areas and heritage clearances.

 

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 first half was $5.8 billion (2023 first half: $5.1 billion). We recorded a profit after tax in 2024 first half of $5.9 billion (2023 first half: $4.9 billion) of which a profit of $0.1 billion was attributable to non-controlling interests (2023 first half loss: $0.2 billion).

Underlying EBITDA

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 39 and 64, respectively.

The principal factors explaining the movements in underlying EBITDA are set out in this table.

	US$bn
2023 first half underlying EBITDA	11.7
Prices	(0.2)
Exchange rates	0.2
Volumes and mix	(0.1)
General inflation (including net impact on provisions)	(0.4)
Energy	0.1
Operating cash unit costs	0.2
Exploration and evaluation expenditure (net of profit from disposal of interests in undeveloped projects)	0.2
Non-cash costs/other	0.4
Change in underlying EBITDA	0.4
2024 first half underlying EBITDA	12.1

Consistent financial results as costs stabilise

In general, we saw lower prices for our commodities, as supply improved, outpacing modest demand growth.

Movements in commodity prices resulted in a $0.2 billion decline in underlying EBITDA overall compared with 2023 first half, reflecting a lower iron ore price and lower aluminium premiums, offset by an increase in the copper LME price.

We have included a table of prices and exchange rates on page 70.

The monthly average Platts index for 62% iron fines converted to a Free on Board (FOB) basis was 3% lower, on average, compared with 2023 first half.

The average LME price for copper was 4% higher, the average LME aluminium price was 1%  higher while the gold price was 14% higher compared with 2023 first half.

The Midwest premium duty paid for aluminium in the US averaged $417 per tonne, 28% lower than in 2023 first half.

Continued benefit from weaker local currencies

Compared with 2023 first half, on average, the US dollar strengthened by 3% against the Australian dollar and was broadly flat against the Canadian dollar. Currency movements increased underlying EBITDA by $0.2 billion relative to 2023 first half.

Stable sales volumes

Copper equivalent sales volumes were 1.4% higher than 2023 first half, underpinned by 15% higher copper sales volumes (consolidated share) and an uplift in volumes from Matalco, following the 2023 acquisition. Underlying EBITDA was $0.1 billion lower, impacted by the margin lost on 3% lower iron ore shipments from the Pilbara (consolidated basis).

Impact of inflation partly offset by lower energy prices

The impact of ~3.5% inflation on our cost base lowered underlying EBITDA by $0.3 billion compared to 2023 first half. The easing of diesel prices and lower prices for natural gas partly offset this impact.

Unit cost pressures ease in first half as lower market-linked raw material prices flow through

We remain focused on cost control, in particular maintaining discipline on fixed costs, which are expected to increase marginally in 2024. While inflation has eased, we continued to see lag effects in its impact on our third party costs, such as contractor rates, consumables and some raw materials; as expected, we are seeing this stabilise in 2024.

We started to see some easing of market-linked prices for key raw materials such as caustic, coke and pitch: these benefited underlying EBITDA by $0.3 billion.

We saw a 20% decline in Copper C1 unit costs, primarily driven by higher refined volumes at Kennecott following the restart of the smelter and refinery.

Overall, we continue to experience tightness in our key labour markets, in Western Australia, Quebec and Utah, which raised costs above general inflation. We also entered into a new collective bargaining agreement at IOC and applied the new labour law in Mongolia. 

We have also increased our investment in decarbonisation, research & development, technology, along with communities and social investment to deliver on our four objectives.   

Increasing our global exploration and evaluation activity

Our ongoing exploration and evaluation expenditure was $0.5 billion, compared with $0.4 billion in 2023 first half on the same basis. This excludes Simandou spend which was $0.3 billion in the first half of 2023 and is now being capitalised. The like-for-like rise was mainly attributable to increased activity at the Rincon lithium project in Argentina and across the other product group projects.  Overall the charge to the Income Statement was $0.5 billion compared to $0.7 billion in 2023 first half.

Net earnings

The principal factors explaining the movements in underlying earnings and net earnings are set out below.

	US$bn
2023 first half net earnings	5.1
Changes in underlying EBITDA (see above)	0.4
Increase in depreciation and amortisation (pre-tax) in underlying earnings	(0.4)
Decrease in interest and finance items (pre-tax) in underlying earnings	0.3
Increase in tax on underlying earnings	(0.1)
Increase in underlying earnings attributable to outside interests	(0.3)
Total changes in underlying earnings	-
Changes in items excluded from underlying earnings (see below)	0.7
Movement in impairment charges net of reversals	0.9
Movement in exchange differences and gains/losses on derivatives	(0.2)
2024 first half net earnings	5.8

Financial figures are rounded to the nearest $100 million, hence small differences may result in the totals. 

Modest increase in tax on underlying earnings from higher profits

The 2024 first half effective tax rate on underlying earnings was 29.5% compared with 30.8% in 2023 first half. The tax on underlying earnings increased by $0.1 billion primarily driven by the increase in underlying EBITDA.

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 period-on-period decrease in costs attributable to outside interests following 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
Six months ended 30 June	US$bn	US$bn
Underlying earnings	5.8	5.7
Items excluded from underlying earnings
Net impairment reversal/(charges)	0.1	(0.8)
Foreign exchange and derivative (losses)/gains on net debt and intragroup balances and derivatives not qualifying for hedge accounting	-	0.2
Total items excluded from underlying earnings	0.1	(0.6)
Net earnings	5.8	5.1

Financial figures are rounded to the nearest $100 million, hence small differences may result in the totals.

On pages 64 to 65 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 39.

We recognised net impairment reversals of $0.1 billion (after tax), with the analysis set out on page 41.

Exchange and derivative movements were minimal in first half 2024 (2023 first half: gain of $0.2 billion). 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.

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
Six months ended 30 June	US$bn	US$bn	%	US$bn	US$bn	%
Iron Ore	8.8	9.8	(10)   %	5.2	5.8	(11)   %
Aluminium	1.6	1.1	38       %	0.6	0.3	113   %
Copper	1.8	1.1	67       %	0.5	0.2	131   %
Minerals	0.7	0.7	-        %	0.1	0.2	(57)   %
Reportable segments total	12.9	12.7	1           %	6.3	6.4	(3)       %
Simandou iron ore project	-	(0.3)	(98)   %	-	(0.1)	(85)   %
Other operations	0.1	(0.1)	-        %	(0.1)	(0.2)	(70)   %
Central pension costs, share-based payments, insurance and derivatives	(0.2)	0.2	(195)        %	(0.1)	0.1	(148)        %
Restructuring, project and one-off costs	(0.1)	(0.1)	32       %	(0.1)	(0.1)	28       %
Other central costs	(0.5)	(0.5)	(4)       %	(0.4)	(0.5)	(11)   %
Central exploration and evaluation	(0.1)	(0.1)	(15)   %	(0.1)	(0.1)	(17)   %
Net interest				0.2	0.1	152   %
Total	12.1	11.7	3           %	5.8	5.7	1           %

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 62 to 69.

Simandou iron ore project

We commenced capitalising qualifying costs attributable to the Simandou project in Guinea from the fourth quarter of 2023. In 2023 first half, we expensed $0.3 billion.

Central and other costs

Pre-tax central pension costs, share-based payments, insurance and derivatives were a $0.2 billion charge compared with a $0.2 billion credit in 2023 first half, reflecting the movement on our unrealised derivative position between the two years as well as the insurance charges incurred by our Captives in relation to claims made by our Minerals business in 2024.

On a pre-tax basis, restructuring, project and one-off central costs were mainly associated with corporate projects and were comparable to 2023 first half.

Other central costs of $0.5 billion were comparable to 2023 first half, with productivity gains offsetting inflation.

On an underlying earnings basis, net interest was a credit of $0.2 billion (2023 first half: credit of $0.1 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 18 countries across eight commodities. This is reflected in our pre-tax central spend of $114 million. The bulk of this expenditure focused on copper in Chile, Kazakhstan and Serbia, nickel in Brazil and Canada, lithium in Canada, US, Chile, Rwanda and Australia, potash in Canada and heavy mineral sands in South Africa and Rwanda.

Cash flow

	2024	2023
Six months ended 30 June	US$bn	US$bn
Net cash generated from operating activities	7.1	7.0
Purchases of property, plant and equipment and intangible assets	(4.0)	(3.0)
Lease principal payments	(0.2)	(0.2)
Free cash flow¹	2.8	3.8
Dividends paid to equity shareholders	(4.1)	(3.7)
Chalco Iron Ore Holdings (CIOH) contribution towards Simfer cash expenditures	0.4	-
Other	-	(0.3)
Movement in net debt¹	(0.8)	(0.2)

Financial figures are rounded to the nearest $100 million, hence small differences may result in the totals.

•  $7.1 billion in net cash generated from operating activities, 1% higher than 2023 first half, primarily driven by higher underlying EBITDA and a smaller seasonal increase in working capital, partially offset by higher taxes paid. The cash outflow from working capital of $0.7 billion in the period reflected the draw down of royalties and taxes payable in the period as prices fell from late 2023, along with seasonal movements in amounts due to JV partners and employees. Operating cash flow also benefited from higher dividends, primarily from Escondida ($0.4 billion in 2024 first half; $0.3 billion in 2023 first half).

•  Taxes paid of $2.6 billion were $0.2 billion higher than 2023 first half, including the impact of timing of payments in Australia.

•  Purchases of property, plant and equipment and intangible assets (capital expenditure) of $4.0 billion was comprised of $1.1 billion of growth ($0.9 billion on a Rio Tinto share basis), $1.1 billion of replacement, $1.7 billion of sustaining and $0.1 billion of decarbonisation capital (in addition to $0.1 billion of decarbonisation spend in operating costs). We funded our capital expenditure from operating activities and generally expect to continue funding our capital program from internal sources.

•  $4.1 billion of dividends paid, being the 2023 final ordinary dividend.

•   The above movements, including $411 million relating to CIOH paying its share of cash expenditures until the end of 2023 for the Simandou project on 28 June 2024, resulted in net debt¹ rising by $0.8 billion during 2024 first half to $5.1 billion at 30 June 2024.

 

Six months ended 30 June	2024 US$m	2023 US$m
Purchase of property, plant and equipment and intangible assets	4,018	3,001
Less: Equity or shareholder loan financing received/due from non-controlling interests	(349)	-
Rio Tinto share of capital investment	3,669	3,001

•  Our share of capital investment in 2024 first half was $3.7 billion, comprised of capital expenditure of $4.0 billion net of equity/shareholder loan financing due from non-controlling interests of $349 million. We expect this to accelerate in the second half of 2024, as we invest in and fund our share of the co-developed rail and port infrastructure being progressed in partnership with Winning Consortium Simandou (WCS)², Baowu and the Republic of Guinea.

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 62 to 69. Our financial results are prepared in accordance with IFRS - see page 34 for further information.

² WCS is the holder of Simandou North Blocks 1 & 2 and associated infrastructure vehicle (with the Government of Guinea holding a 15% interest in each of the Guinean mining and infrastructure vehicles and WCS holding 85%). 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. After Closing, Simfer Jersey will hold 34% of the shares in the WCS Singapore-incorporated infrastructure entities during construction with WCS holding the remaining 66%.

 

Balance sheet

Net debt¹ of $5.1 billion at 30 June 2024 increased by $0.8 billion compared to the year end.

Our net gearing ratio¹ (net debt to total capital) was 8% at 30 June 2024 (31 December 2023: 7%). See page 68.

Our total financing liabilities excluding net debt derivatives at 30 June 2024 (see page 68) were $14.3 billion (31 December 2023: $14.4 billion) and the weighted average maturity was around 11 years. At 30 June 2024, approximately 75% of these liabilities were at floating interest rates (83% 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 $9.7 billion in cash and cash equivalents plus other short-term cash investments at 30 June 2024 (31 December 2023: $10.5 billion).

Provision for closure costs

At 30 June 2024, provisions for close-down and restoration costs and environmental clean-up obligations were $15.9 billion (31 December 2023: $17.2 billion). The decrease was largely due to  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, which is a key input to our closure discount rate and resulted in a $1.0 billion decrease.  The provision further reduced by $0.4 billion due to the strengthening of the US dollar against local currencies and cash spend on rehabilitation activities of $0.4 billion, offset by amortisation of the discount ($0.4 billion). In 2024, the cash spend is expected to be around $1.2 billion following a one-off investment in July to reduce our long term exposure to a legacy site in France.

 

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 62 to 69. Our financial results are prepared in accordance with IFRS - see page 34 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.

50% payout ratio on the ordinary dividend, in line with our practice

	2024 US$bn	2023 US$bn
Ordinary dividend
Interim¹	2.9	2.9
Payout ratio on ordinary dividend	50%	50%

¹ Based on weighted average number of shares and declared dividends per share for the respective periods and excluding foreign exchange impacts on payment.

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

The 2024 interim 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 26 September 2024, we will pay the 2024 interim ordinary dividend to Rio Tinto plc and Rio Tinto Limited holders of ordinary shares and holders of Rio Tinto plc ADRs (American Depositary Receipts) on the register at the close of business on 16 August 2024 (record date). The ex-dividend date is 15 August 2024.

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 pound sterling, Australian dollar and New Zealand dollar exchange rates seven business days before the dividend payment date. Rio Tinto plc and Rio Tinto Limited shareholders must register any changes to their currency elections, including elections to receive their dividend payments in US dollars, by 5 September 2024. In the absence of updated payment elections being received by the share registrar, interim dividends will be paid as per the existing payment currency elections.

ADR holders receive dividends at the declared rate in US dollars.

We will operate our Dividend Reinvestment Plans for the 2024 interim dividend (visit riotinto.com for details). Rio Tinto plc and Rio Tinto Limited shareholders' election notice for the Dividend Reinvestment Plans must be received by 5 September 2024. 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 (Rio Tinto 100% owned unless otherwise stated)	Total capital cost (100% unless otherwise stated)	Capital remaining to be spent from 1 July 2024	Status/Milestones
Ongoing
Iron ore
Investment in the Western Range iron ore project, a joint venture between Rio Tinto (54%) and China Baowu Steel Group Co. Ltd (46%) in the Pilbara to sustain production of the Pilbara BlendTM from Rio Tinto's existing Paraburdoo hub. First production is anticipated in 2025.	$1.3bn (Rio Tinto share)1	$0.5bn (Rio Tinto share)	Approved in September 2022, the mine will have a capacity of 25 million tonnes per year. The project includes construction of a primary crusher and an 18 kilometre conveyor connection to the Paraburdoo processing plant. Construction is now 70% complete, with development of the initial mining area completed during the half. First ore from the new primary crusher and conveyor system is on plan for 2025.
Investment in the Simandou high grade iron ore project in Guinea in partnership with CIOH, a Chinalco-led consortium (the Simfer joint venture) and co-development of the rail and port infrastructure with Winning Consortium 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 WCS's respective mining concessions.3 The Simfer joint venture4 will develop, own and operate a 60 million tonne per year5 mine in blocks 3 & 4. WCS will construct the project's ~536 kilometre dual track main line as well as the WCS barge port, while Simfer will construct the ~70 kilometre spur line, connecting its mining concession to the main rail line, and the transshipment vessel port.	$6.2bn (Rio Tinto share)	$5.3bn (Rio Tinto share)	Announced in December 2023, first production at the Simfer mine is expected in 2025, ramping up over 30 months to a 60 million tonne per year capacity (27 million tonnes Rio Tinto share). For the Simfer mine, work on support facilities, including camps, roads, and water and waste facilities is progressing well. For the Simfer infrastructure scope, we completed preparatory work on the bridge foundations which will be used to construct the railway spur. All infrastructure contracts have now been awarded. All conditions have now been satisfied for Rio Tinto's investment to develop the deposit, including the completion of necessary Guinean and Chinese regulatory approvals, and we have completed our investment in WCS2 to co-develop the rail and port infrastructure.
Aluminium
Investment to expand the low-carbon AP60 aluminium smelter at the Complexe Jonquière in Quebec. The investment includes up to $113 million of financial support from the Quebec government. Commissioning is expected in the first half of 2026, with the smelter fully ramped up by the end of that year. Once completed, it is expected to be in the first quartile of the industry operating cost curve.	$1.1bn	$0.9bn	Approved in June 2023, AP60 expansion construction activities progressed, with the first prefabricated steel structures delivered to site. Once completed, the project will add 96 new AP60 pots, increasing capacity by approximately 160,000 metric tonnes of primary aluminium per year by the end of 2026. This new capacity, in addition to 30,000 tonnes of new recycling capacity at Arvida expected to open in the fourth quarter of 2025, will offset the 170,000 tonnes of capacity lost through the gradual closure of potrooms at the Arvida smelter from 2024.
Copper
Phase two of the south wall pushback to extend mine life at Kennecott in Utah by a further six years.	$1.8bn	$1.1bn	Approved in December 2019, the investment will further extend strip waste rock mining and support additional infrastructure development. This will allow mining to continue into a new area of the orebody between 2026 and 2032. In March 2023, a further $0.3 billion was approved to primarily mitigate the risk of failure in an area of geotechnical instability known as Revere, necessary to both protect open pit value and enable underground development.
Investment in the Kennecott underground development of the North Rim Skarn (NRS) area.	$0.5bn	$0.5bn	Approved in June 2023, production from NRS6 is expected to commence around mid-year 2025 and is expected to ramp up over two years, to deliver around 250,000 tonnes of additional mined copper over the next 10 years7 alongside open cut operations.
Development of the Oyu Tolgoi underground copper-gold mine in Mongolia (Rio Tinto 66%), which is expected to produce (from the open pit and underground) an average of ~500,000 tonnes8 of copper per year from 2028 to 2036.	$7.06bn	$0.7bn	We delivered first sustainable underground production from Panel 0 in March 2023. The commissioning of infrastructure for ramp-up to full capacity remains on target: we expect shafts 3 and 4 and the conveyor to surface in the second half of 2024, while the concentrator conversion is expected to be progressively completed from the fourth quarter of 2024 through to the second quarter of 2025. Construction of primary crusher 2 commenced in December 2023 and is due to be complete by the end of 2025.

 

 

 

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. After Closing, Simfer will hold 34% of the shares in the WCS infrastructure entities during construction with WCS holding the remaining 66%.

3.   WCS holds the mining concession for Blocks 1 and 2, while Simfer SA holds the mining concession for blocks 3 and 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 Infraco Guinée S.A.U. will deliver Simfer Jersey's scope of the co-developed rail and port infrastructure, and is, an indirect subsidiary of Simfer Jersey Limited (85%) co-owned by the Guinean State (15%) as of 17 July 2024. 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%).

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.

 

Future options

	Status
Iron Ore: Pilbara brownfields
Over the medium term, our Pilbara system capacity remains between 345 and 360 million tonnes per year. Meeting this range, and the planned product mix, will require the approval and delivery of the next tranche of replacement mines over the next five years.	We continue to work closely with local communities, Traditional Owners and governments to progress approvals for these new mining projects. We are advancing our next tranche of Pilbara mine replacement studies including the Hope Downs 1 (Hope Downs 2 and Bedded Hilltop), Brockman 4 (Brockman Syncline 1), Greater Nammuldi and West Angelas projects. Early works have commenced at Hope Downs 1. Project timelines remain subject to timing of approvals and heritage clearances with the Greater Nammuldi project starting to diverge from the original development schedule.
Iron Ore: Rhodes Ridge
In October 2022, Rio Tinto (50%) and Wright Prospecting Pty Ltd (50%) agreed to modernise the joint venture covering the Rhodes Ridge project in the Eastern Pilbara, providing a pathway for development utilising Rio Tinto's rail, port and power infrastructure.	In December 2023, we announced approval of a $77 million pre-feasibility study (PFS). The PFS continues to progress with good engagement with Traditional Owners and government. The PFS, which is targeting an initial capacity of up to 40 million tonnes per year, subject to relevant approvals, is expected 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 include an underground mine with associated infrastructure and equipment, as well as a beneficiation chemical processing plant. The Board committed funding in July 2021, subject to receiving all relevant approvals, permits and licences. The studies and capital estimates will need to be updated before project approval.	On 16 July 2024, the Constitutional Court of Serbia issued a decision stating the 2022 decree by the Government of Serbia to abolish the Jadar project spatial plan was unconstitutional and illegal. Subsequently, the Government of Serbia has reinstated the spatial plan to its previously adopted form. Following the decisions, we have continued to focus on consultation with all key stakeholders, including providing comprehensive factual information about the project. To support a public dialogue, the Jadar project released the draft Environmental Impact Assessment (EIA) studies which provide insights into the project's potential environmental impacts and the proposed mitigation actions. Independent Serbian and international experts have confirmed the Jadar Project can be implemented safely in line with the highest environmental standards. The Jadar project will be subject to stringent environmental requirements in compliance with Serbian and EU regulations. This includes having to progress through an extended phase of legal, EIA and permitting procedures, as well as public consultations, and further business evaluations, before implementation of the project.
Lithium: Rincon
We completed the acquisition of the Rincon Lithium project in Salta province, Argentina in March 2022. Studies are continuing on the full-scale plant, which will have benefits of economies of scale, with the capital intensity, based on current stage of studies, forecast to be in line with regional lithium industry benchmarks. In July 2022, we approved $140 million of investment and $54 million for early works to support a full-scale operation. To date, the majority of costs have been expensed through exploration and evaluation expenditure. In July 2023, we approved a further $195 million to complete the starter plant. Following approval by the Argentine Congress of the new "RIGI" legislation (Law 27,742), we intend to capitalise qualifying Rincon expenditure from 1 July 2024.	Development of the 3,000 tonne per annum battery-grade lithium carbonate starter plant continues to progress to plan with civil concrete work completed and all steel, cable and piping on site, and being progressively installed. An additional 400-bed camp facility has also been constructed, bringing the total number of new beds on site to 900. Commissioning planning is advancing and we continue to expect first production from the starter plant by the end of 2024. We expect to complete the feasibility study for the full-scale operation in the third quarter of 2024. We continue to engage with communities, the province of Salta and the Government of Argentina to ensure an open and transparent dialogue with stakeholders about the works underway.
Mineral Sands: Zulti South
Development of the Zulti South project at Richards Bay Minerals (RBM) in South Africa (Rio Tinto 74%).	Approved in April 2019 to underpin RBM's supply of zircon and ilmenite over 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 Copper Triangle, in Arizona, US (Rio Tinto 55%). It has the potential to supply up to 25% of US copper demand. The United States Forest Service (USFS) continued work to progress the Final Environmental Impact Statement (FEIS) and complete actions necessary for the land exchange.	The Ninth Circuit Court of Appeals denied Apache Stronghold's request to further hear their case to stop the land exchange between Resolution Copper and the federal government. It is anticipated that Apache Stronghold will file a petition in the second half of 2024 for the case to be heard by the U.S. Supreme Court. We continue to progress the FEIS with the USFS, but they have yet to advise on the date of re-publication. We also advanced partnership discussions with federally-recognised Native American Tribes who are part of the formal consultation process. 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 the Paterson Province in Western Australia. In 2021, we reported our first Indicated Mineral Resource. The pathway remains subject to regulatory and other required approvals. In parallel, we continue to explore options aimed at enhancing project value, including further optimisation of the current pathway and alternative development models and partnerships.	We continue to work with the Traditional Owners to progress the Winu copper-gold project, which remains subject to all of the required approvals. Drilling, studies and fieldwork to advance the key environmental permitting and Project Agreement negotiations with Nyangumarta and the Martu remain our priority.
Copper: La Granja
In August 2023, we completed a transaction to form a joint venture with First Quantum Minerals that will work to unlock the development of the La Granja project in Peru, one of the largest undeveloped copper deposits in the world, with potential to be a large, long-life operation.	First Quantum Minerals acquired a 55% stake in the project for $105 million and will invest up to a further $546 million into the joint venture to sole fund capital and operational costs to take the project through a feasibility study and toward development. All subsequent expenditures will be applied on a pro-rata basis in line with shared ownership.
Aluminium: ELYSIS
ELYSIS, our joint venture with Alcoa, supported by Apple, the Government of Canada and the Government of Quebec, is developing a breakthrough inert anode technology that eliminates all direct greenhouse gases from the aluminium smelting process.	We will install carbon free aluminium smelting cells at our Arvida smelter in Quebec using the first technology licence issued by the ELYSIS joint venture. We will design, engineer and build a demonstration plant equipped with ten 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 ELYSISTM technology. It has begun commissioning the larger prototype 450 kA cells at the Alma smelter, with the start-up sequence set to begin in 2024.

 

 

Review of operations

Iron Ore

Six months ended 30 June	2024	2023	Change
Pilbara production (million tonnes - 100%)	157.4	160.5	(2)       %
Pilbara shipments (million tonnes - 100%)	158.3	161.7	(2)       %
Salt production (million tonnes - Rio Tinto share)¹	3.0	3.1	(4)       %
Segmental revenue (US$ millions)	15,206	15,600	(3)       %
Average realised price (US$ per dry metric tonne, FOB basis)	105.8	107.2	(1)       %
Underlying EBITDA (US$ millions)	8,807	9,792	(10)   %
Pilbara underlying FOB EBITDA margin²	67%	69%
Underlying earnings (US$ millions)	5,170	5,787	(11)   %
Net cash generated from operating activities (US$ millions)	6,312	6,782	(7)       %
Capital expenditure (US$ millions)3	(1,258)	(1,094)	15       %
Free cash flow (US$ millions)	5,029	5,639	(11)   %
Underlying return on capital employed4	55%	63%

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 $8.8 billion was 10% lower than 2023 first half, primarily due to lower realised prices ($0.2 billion) and lower shipments, which were impacted by a train collision in May. 

Unit cost guidance for 2024 is unchanged at $21.75 to $23.5 per tonne (based on an average A$:US$ exchange rate of 0.66). In 2024 first half, unit costs were $23.2 per tonne, with shipments weighted to the second half.

Our Pilbara operations delivered an underlying FOB EBITDA margin of 67%, compared with 69% in 2023 first half, largely due to the lower iron ore price and lower volumes.

We price the majority of our iron ore sales (77%) by reference to the average index price for the month of shipment. In 2024 first half, 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, on the spot market or other mechanisms. We made approximately 74% of sales including freight and 26% on an FOB basis.

We achieved average pricing in the first half of 2024 of $97.3 per wet metric tonne ($98.6 in the first half of 2023) on an FOB basis (equivalent to $105.8 per dry metric tonne, with an 8% moisture assumption). This compares to the average first half price for the monthly average Platts index for 62% iron fines converted to a FOB basis of $106.0 per dry metric tonne.

Segmental revenue for our Pilbara operations included freight revenue of $1.1 billion (2023 first half: $0.9 billion).

Net cash generated from operating activities of $6.3 billion was 7% lower than 2023 first half, driven by the same drivers as underlying EBITDA. Free cash flow of $5.0 billion was $0.6 billion lower than 2023 first half, mostly driven by the $0.2 billion increase in capital expenditure

Review of operations

Pilbara operations produced 157.4 million tonnes (100% basis), 2% lower than 2023 first half. Shipments (100% basis) were also 2% lower. Productivity gains offset ore depletion, however production and shipping in the half were impacted by a train collision in May, which resulted in around six days of lost rail capacity and full stockpiles at some mines.

Our iron ore portside sales in China were 14.0 million tonnes in the first half of 2024 (11.9 million tonnes in 2023 first half). At the end of June, inventory levels were 6.1 million tonnes (6.4 million tonnes at the end of December 2023), including 3.2 million tonnes of Pilbara product. In the first half of 2024, approximately 90% of our portside sales were either screened or blended in Chinese ports.

In January 2024, Dampier Salt Limited entered into a sales agreement for the Lake MacLeod salt and gypsum operation in Carnarvon, Western Australia with privately-owned salt company Leichhardt Industrials Group for $251 million (A$375 million). Completion of the sale is subject to certain commercial and regulatory conditions being satisfied. The transaction is subject to capital gains tax.

 

 Aluminium

Six months ended 30 June	2024	2023	Change
Bauxite production ('000 tonnes - Rio Tinto share)	28,142	25,581	10       %
Alumina production ('000 tonnes - Rio Tinto share)	3,540	3,720	(5)       %
Aluminium production ('000 tonnes - Rio Tinto share)	1,650	1,598	3           %
Segmental revenue (US$ millions)	6,486	6,263	4           %
Average realised aluminium price (US$ per tonne)	2,746	2,866	(4)       %
Underlying EBITDA (US$ millions)	1,577	1,140	38       %
Underlying EBITDA margin (integrated operations)	27%	21%
Underlying earnings (US$ millions)	555	260	113   %
Net cash generated from operating activities (US$ millions)	1,112	777	43       %
Capital expenditure - excluding EAUs (US$ millions)1	(705)	(597)	18       %
Free cash flow (US$ millions)	390	165	136   %
Underlying return on capital employed2	7%	4%

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

We saw a 1% increase in the average LME price but there was no corresponding uplift in market and product premiums. 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 from a higher alumina price. Overall there was significant rise in margins for our Aluminium business with a 38% increase in underlying EBITDA to $1.6 billion. Underlying EBITDA margin rose six percentage points to 27%.

We achieved an average realised aluminium price of $2,746 per tonne, 4% lower than 2023 first half. The average realised aluminium prices comprise the LME price, a market premium and a value-added product (VAP) premium. The cash LME price averaged $2,358 per tonne, 1% higher than 2023 first half, while in our key US market, the Midwest premium duty paid, which is 59% of our total volumes (2023 first half: 56%), decreased by 28% to $417 per tonne (2023 first half: $583 per tonne). Our VAP sales represented 45% of the primary metal we sold (2023 first half: 47%) and generated product premiums averaging $287 per tonne of VAP sold (2023 first half: $377 per tonne).

Our cash generation remained relatively strong, with net cash generated from operating activities of $1.1 billion, a rise of 43%. Free cash flow of $0.4 billion reflected investment in the business of $0.7 billion.

Review of operations

Bauxite production of 28 million tonnes was 10% higher than 2023 first half, reflecting the implementation of the Safe Production System, especially at Weipa where we achieved higher plant utilisation and feed rates. As a consequence, our Group full year bauxite production guidance is expected to be around the top end of our 53 to 56 million tonne range.

We shipped 19.2 million tonnes of bauxite to third parties, 13% higher than 2023 first half. Segmental revenue for bauxite increased 29% to $1.4 billion. This includes freight revenue of $0.2 billion (2023 first half: $0.2 billion).

Alumina production of 3.5 million tonnes was 5% lower than 2023 first half, due to the impacts to our Gladstone operations from the breakage of the third-party operated Queensland Gas Pipeline in March. The gas pipeline outage has reduced our third party sales but there has been no impact on our aluminium production. As a result, our net long alumina position in 2024 first half was only 0.1 million tonnes.

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 our production results as QAL remains 80% owned by Rio Tinto and 20% owned by Rusal.

Aluminium production of 1.7 million tonnes was 3% higher than 2023 first half, with our smelters continuing to demonstrate stable performance, with ISAL returning to 100% capacity after reducing its electricity load following volcanic eruptions earlier in the half.

Copper

Six months ended 30 June	2024	2023	Change
Mined copper production ('000 tonnes - consolidated basis)	327	290	13       %
Refined copper production ('000 tonnes - Rio Tinto share)	125	95	32       %
Segmental revenue (US$ millions)	4,408	3,487	26       %
Average realised copper price (US cents per pound)¹	419	396	6           %
Underlying EBITDA (US$ millions)	1,804	1,082	67       %
Underlying EBITDA margin (product group operations)	53%	43%
Underlying earnings (US$ millions)	457	198	131   %
Net cash generated from operating activities (US$ millions)²	1,101	409	169   %
Capital expenditure - excluding EAUs³ (US$ millions)	(970)	(917)	6           %
Free cash flow (US$ millions)	127	(512)
Underlying return on capital employed (product group operations)⁴	7%	4%

1.   Average realised price for all units sold. Realised price does not include the impact of the provisional pricing adjustments, which positively impacted revenues by $93 million (2023 first half: $10 million negative).

2.   Net cash generated from operating activities excludes the operating cash flows of equity accounted units (EAUs) but includes dividends from EAUs (Escondida).

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. It excludes EAUs.

4.   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 and the Kennecott smelter resuming normal operations following the rebuild in 2023. Underlying EBITDA increased by 67% from first half 2023 and free cash flow turned positive supported by a strong LME copper price and higher volumes. Overall, our mined copper rose by 13% and refined by 32%.

Our copper unit costs, at 147 cents per pound, down by 37 cents per pound, or 20%, as a result of the higher production of refined copper with the Kennecott smelter processing material from both the mine and concentrate inventory. Guidance for 2024 copper C1 unit cost is unchanged at 140 to 160 US cents per pound.

We generated $1.1 billion in net cash from operating activities, a 169% increase from first half 2023, from the same drivers as underlying EBITDA and a higher dividend from Escondida.

Review of operations

Mined copper production, at 327 thousand tonnes, was 13% higher than 2023 first half, reflecting higher output from all three operations. Oyu Tolgoi benefited from the continued ramp-up in underground production in line with our long term plan, Escondida saw an improvement in concentrator feed grade as mining continued into higher grade zones, together with higher concentrator output, while Kennecott was higher following the conveyor outage in 2023 first half.

Refined copper production increased by 32% to 125 thousand tonnes with the Kennecott smelter and refinery returning to normal operations following the successful rebuild in 2023.

Oyu Tolgoi underground project

In 2024 first half, we delivered 2,845 thousand tonnes of ore milled from the underground mine at an average copper head grade of 1.86% and 18,295 thousand tonnes from the open pit with an average grade of 0.38%. 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 2036¹.

We continue to see good performance from the underground mine, with a total of 114 drawbells opened from Panel 0, including 27 during the half.

The sinking of ventilation Shafts 3 and 4 was completed in April following the breakthrough to surface. Both shafts remain on track to be commissioned in the second half of 2024.

Construction works for the conveyor to surface continued to plan and were 97% complete at the end of the quarter. Commissioning remains on track for the second half of 2024. 

Construction works for the concentrator conversion remains on schedule. Commissioning is expected to be progressively completed from the fourth quarter of 2024 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.

We expect to enter negotiations on a new Collective Labour Agreement in the second half of the year. Our current agreement expires in April 2025.

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

Six months ended 30 June	2024	2023	Change
Iron ore pellets and concentrates production¹ (million tonnes - Rio Tinto share)	4.8	4.6	4           %
Titanium dioxide slag production ('000 tonnes - Rio Tinto share)	492	589	(16)   %
Borates production ('000 tonnes - Rio Tinto share)	246	257	(4)       %
Diamonds production ('000 carats - Rio Tinto share)	1,441	1,924	(25)   %
Segmental revenue (US$ millions)	2,738	2,889	(5)       %
Underlying EBITDA (US$ millions)	687	689	-        %
Underlying EBITDA margin (product group operations)	34%	30%
Underlying earnings (US$ millions)	77	179	(57)   %
Net cash generated from operating activities (US$ millions)	267	89	200   %
Capital expenditure (US$ millions)2	(271)	(304)	(11)   %
Free cash flow (US$ millions)	(19)	(229)	(92)   %
Underlying return on capital employed (product group operations)3	12%	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 $0.7 billion was in line with first half 2023, primarily due to lower volume for titanium dioxide feedstocks and diamonds, and the lower iron ore price. 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 $0.3 billion was 200% higher than first half 2023, while negative free cash flow of $19 million reflected the lower underlying EBITDA, higher working capital due to market conditions and lower capital expenditure.

Underlying EBITDA and net cash generated from operating activities include $0.2 billion¹ insurance proceeds relating to the process safety incidents at RTIT and the forest fires at IOC in 2023. 

Review of operations

Production of iron ore pellets and concentrate at IOC of 4.8 million tonnes was 4% higher than first half 2023 when production was impacted by wildfires. Production is expected to be weighted to the second half of 2024 supported by seasonal factors.

TiO₂ slag production of 492 thousand tonnes was 16% lower than first half 2023, primarily driven by continued weak market conditions. Whilst a furnace reconstruction is underway at our RTIT Quebec Operations, we continue to operate six out of nine furnaces in Quebec and three out of four at Richards Bay Minerals (RBM).

Borates production was 4% lower than first half 2023, impacted by unplanned plant downtime in April and recovering market demand.

Our share of carats recovered was 25% lower than first half 2023. Production was impacted by the tragic plane crash earlier in the year, as well as cessation of A21 open pit mining in the third quarter of 2023.    

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 price/exchange rate for 2024 first half	US$ million impact on full-year 2024 underlying EBITDA of a 10% change in prices/exchange rates
Aluminium (LME)  - US$ per tonne	2,358	1,212
Copper (LME)  - US cents per pound	412	627
Gold - US$ per troy ounce	2,203	74
Iron ore realised price (FOB basis) - US$ per dry metric tonne	105.8	2,662
Australian dollar against the US dollar	0.66	752
Canadian dollar against the US dollar	0.74	320
Oil (Brent) - US per barrel	84	183

 

DIRECTORS' REPORT

for the half year ended 30 June 2024

Review of operations and important events

A detailed review of the Group's operations, the results of those operations during the half year ended 30 June 2024 and likely future developments are given on pages 1 to 23. Important events that have occurred during the period and up until the date of this report are set out below.

Financial

On 28 March 2024, we published our 2023 Taxes and Royalties Paid Report, detailing $8.5 billion of global taxes and royalties paid during the year. This compares to $10.8 billion in 2022, which included around $1.5 billion of Australian corporate tax payments related to prior years. In the past ten years, Rio Tinto has paid $76 billion in taxes and royalties globally, of which more than 78% was paid in Australia.

On 23 May 2024, we published a report on payments to governments made by Rio Tinto and its subsidiary undertakings for the year ended 31 December 2023 as required under the UK's Report on Payments to Governments Regulations 2014 (as amended in December 2015). Rio Tinto paid US$8.5 billion of taxes and royalties and a further US$1.8 billion on behalf of its employees during 2023.

Operations

On 16 January 2024, we announced Dampier Salt Limited (a joint venture between Rio Tinto (68%), Marubeni Corporation (22%) and Sojitz (10%)) had entered into a sales agreement for the Lake MacLeod salt and gypsum operation in Carnarvon, Western Australia, with privately-owned salt company Leichhardt Industrials Group for A$375 million (US$251 million).

On 24 January 2024, we announced we will drive development of Australia's largest solar power project near Gladstone, after agreeing to buy all electricity from the 1.1GW¹ Upper Calliope Solar Farm to provide renewable power to Rio Tinto's Gladstone operations. Under a new renewable power purchase agreement ("PPA") signed with European Energy Australia, Rio Tinto will buy all power generated from the Upper Calliope solar farm for 25 years.

On 24 January 2024, we were informed by authorities that four team members from our Diavik diamond mine and two airline crew members had died in a plane crash near Fort Smith, Northwest Territories, Canada. Another member of our Diavik team survived the crash and received treatment in hospital.

On 21 February 2024, we announced we had signed Australia's largest renewable PPA to date to supply our Gladstone operations in Queensland, agreeing to buy the majority of electricity from Windlab's planned 1.4GW Bungaban wind energy project. Under the new PPA with Windlab, Rio Tinto will buy 80% of all power generated from the Bungaban wind energy project over 25 years.

On 31 May 2024, we announced New Zealand Aluminium Smelters (NZAS) had signed 20-year electricity arrangements that secure the future of the Tiwai Point aluminium smelter to continue competitively producing high-purity, low-carbon metal, backed by a diversified mix of renewable electricity from New Zealand's South Island. In a separate transaction, Rio Tinto entered into an agreement to acquire Sumitomo Chemical Company Limited's 20.64% interest in NZAS for an undisclosed price. On completion of the transaction, NZAS will be 100% owned by Rio Tinto.

On 28 June 2024, we announced we will install carbon free aluminium smelting cells at our Arvida smelter in Quebec, Canada, using the first technology licence issued by the ELYSIS joint venture. This investment will support the ongoing development of the breakthrough ELYSIS^TM technology and allow Rio Tinto to build expertise in its installation and operation.

1.   1.1GWac or 1.3GWp

People

On 21 February 2024, we announced that Simon McKeon will step down as a Non-Executive Director at the conclusion of the Rio Tinto Limited annual general meeting on 2 May 2024.

On 8 April 2024, we announced that Bold Baatar will succeed Alf Barrios as Chief Commercial Officer effective 1 September 2024, following Alf's decision to retire from Rio Tinto.

Rio Tinto 2024 Annual General Meetings (AGMs)

The annual general meetings of Rio Tinto plc and Rio Tinto Limited were held on 4 April 2024 and 2 May 2024 respectively. Under Rio Tinto's dual listed companies structure established in 1995, decisions on significant matters affecting shareholders of Rio Tinto plc and Rio Tinto Limited in similar ways are taken through a joint electoral procedure.

At Rio Tinto plc's AGM on 4 April 2024, Resolution 25 (Authority to purchase Rio Tinto plc shares), put to Rio Tinto plc shareholders only, was passed with less than 80% of votes in favour. Shining Prospect (a subsidiary of the Aluminium Corporation of China "Chinalco") voted against it. Chinalco has not sold any of its shares in Rio Tinto plc and now has a holding of over 14% given its non-participation in the Company's significant share buy-back programmes. This places Chinalco close to the 14.99% holding threshold agreed with the Australian Government at the time of its original investment in Rio Tinto.

Directors

The Directors serving on the Boards of Rio Tinto plc and Rio Tinto Limited were as follows:

	Notes	Date of appointment
Chair
Dominic Barton	(P&R, N and S)	4 April 2022
Executive Directors
Jakob Stausholm, Chief Executive		3 September 2018
Peter Cunningham, Chief Financial Officer		17 June 2021
Non-Executive Directors
Sam Laidlaw (senior independent director, Rio Tinto plc)	(P&R, N and S)	10 February 2017
Simon Henry	(A&R and N)	1 April 2017
Jennifer Nason	(P&R)	1 March 2020
Ngaire Woods	(N and S)	1 September 2020
Ben Wyatt	(P&R and A&R)	1 September 2021
Kaisa Hietala	(A&R and S)	1 March 2023
Dean Dalla Valle	(P&R, N and S)	1 June 2023
Susan Lloyd-Hurwitz	(P&R)	1 June 2023
Martina Merz	(S)	1 February 2024
James O'Rourke	(A&R)	25 October 2023
Sharon Thorne	(A&R)	1 July 2024

Notes

(A&R) Audit & Risk Committee, (P&R) People & Remuneration Committee, (N) Nominations Committee, (S) Sustainability Committee.

Dividend

The 2023 final dividend was paid on 18 April 2024 to holders of Rio Tinto plc and Rio Tinto Limited ordinary shares and Rio Tinto plc ADR holders. The 2023 final dividend, equivalent to 258 US cents per share was determined by the Board on 20 February 2024. Rio Tinto plc shareholders received 203.77 pence per share for the final dividend and Rio Tinto Limited shareholders received 392.78 Australian cents per share for the final dividend based on the applicable exchange rates on 11 April 2024. ADR holders receive dividends at the declared rate in US dollars.

The 2024 interim dividend, equivalent to 177 US cents per share will be paid on 26 September 2024 to Rio Tinto Limited, Rio Tinto plc and Rio Tinto plc ADR shareholders on the register at the close of business on 16 August 2024. The ex-dividend date for the 2024 interim dividend for Rio Tinto Limited, Rio Tinto plc and Rio Tinto plc ADR shareholders is 15 August 2024.

Principal risks and uncertainties

The principal risks and uncertainties that could materially impact our ability to deliver on our strategic priorities are set out on pages 81 to 88 of the 2023 Annual Report. For the remaining six months of the financial year, these remain broadly consistent with the trends reported in the Annual Report.

We continue to monitor and respond to changes in our risk profile, including those arising from changes in the macroeconomic and geopolitical environment. 

Publication of half year results

In accordance with the UK Financial Conduct Authority's Disclosure Guidance & Transparency Rules and the Australian Securities Exchange Listing Rules, the half year results will be made public and are available on the Rio Tinto Group website.

Auditor's independence declaration

KPMG, the auditors of Rio Tinto Limited, have provided the auditor's independence declaration as required under section 307C of the Corporations Act 2001 in Australia. This has been reproduced on page 57 and forms part of this report.

The Directors' report is made in accordance with a resolution of the Board.

Dominic Barton

Chair

31 July 2024

 

Condensed consolidated interim financial statements for the

six months ended 30 June 2024

 

Contents

Interim financial statements	Page number
Group income statement	28
Group statement of comprehensive income	29
Group cash flow statement	30
Group balance sheet	32
Group statement of changes in equity	33

 

Selected explanatory notes to the interim financial statements
1	Basis of preparation	34
2	Changes in accounting policies	35
3	Segmental information	37
4	Segmental information - additional information	40
5	Impairment	41
6	Taxation	43
7	Acquisitions and disposals	44
8	Cash and cash equivalents	44
9	Close-down, restoration and environmental provisions	45
10	Financial instruments	46
11	Commitments and contingencies	50
12	Events after the balance sheet date	52

 

Directors' declaration	53
Independent Auditors' Review Reports of KPMG LLP ("KPMG UK") to Rio Tinto plc and of KPMG ("KPMG Australia") to the members of Rio Tinto Limited	54
Lead Auditor's Independence Declaration under Section 307C of the Australian Corporations Act 2001	57
Additional voluntary disclosure for the shareholders
Rio Tinto financial information by business unit	58
Alternative performance measures	62
Metal prices and exchange rates	70