Rio Tinto (ASX:RIO) has announced its lowest dividend payment in seven years, citing higher production costs and weaker iron ore prices as key factors in an 8% decline in full-year profit. The miner reported an underlying profit of $US10.86 billion for 2024, below analyst expectations of $US10.98 billion.
Shareholders will receive a final dividend of $US2.25 per share on 17 April, bringing total dividends for the year to $US4.02 per share—the lowest since 2017. The payout remains within the company’s policy of distributing 40% to 60% of underlying earnings, with the latest dividend set at the upper end of that range.
The decline in iron ore prices, driven by weaker demand for property development in China, saw Rio’s iron ore revenue fall by 11% in 2024. This drop outweighed an 8% rise in copper and aluminium prices.
Rio’s unit production costs in the Pilbara increased by 7% to $US23 per tonne last year and are expected to rise again by up to 6% in 2025, reaching between $US23 and $US24.50 per tonne.
Chief executive Jakob Stausholm said Rio is investing in growth projects, including the Simandou iron ore project in Guinea, to support “a decade of profitable growth.”
The weaker dividend follows a broader trend in the resources sector, with BHP earlier this week announcing its lowest half-year dividend in eight years.
