Copper Fuels Rio Tinto's Surprise Earnings Beat
Rio Tinto's latest earnings beat expectations thanks to a significant surge in copper prices and production. Copper is now contributing 36% of Rio's total EBITDA, up from unknown levels in previous years.
The iron ore price saw a more modest increase, with Rio's realised pricing rising by just 2%. However, this still helped drive overall earnings higher, particularly when combined with strong performances from the company's lithium and aluminium divisions.
Copper prices have risen by 39% year-on-year, while production is up by 3%. This has contributed significantly to Rio's increased free cash flow, which rose by 75% to $5.43 billion over the past six months. Net debt fell by $300 million, and the gearing ratio stood at 16%.
Rio CEO Simon Trott described the recent result as a 'step change', crediting accelerating productivity across the business for the improvement. The company has already banked $870 million of productivity benefits and is on track to reach an annualised run-rate of $1.8 billion by year-end.