Rio Tinto Falls on Flat Earnings Amid Broader Mining Sector Selloff

Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) experienced a 4% decline in early trading following the release of flat underlying earnings of $10.9 billion for 2025. The share price weakness was compounded by a wider selloff across the mining sector, which contributed to downward pressure on the FTSE 100. Fellow miners Antofagasta, Glencore and Anglo American similarly suffered losses during the session.

The company’s underlying earnings remained unchanged year-on-year, as improved performance in copper and aluminium operations balanced weaker iron ore pricing. Net cash generated from operating activities increased 8% to $16.8 billion, whilst consolidated sales revenue rose 7% to $57.6 billion.

Management attributed the broadly neutral earnings impact to the group’s diversification strategy. A 6% decline in realised iron ore prices, which averaged $90 per dry metric tonne, was offset by higher prices achieved across bauxite, alumina, aluminium, copper and gold.

Copper equivalent production advanced 8%, supported by a substantial 61% increase in output from the Oyu Tolgoi underground mine alongside improved grades at Escondida. Copper shipments rose 12%, delivering a $2.9 billion uplift from volume growth. Underlying EBITDA in the copper division more than doubled to $7.4 billion, representing a significant contribution to group performance.

The iron ore division experienced an 11% decline in underlying EBITDA to $15.2 billion, as weaker pricing overshadowed resilient Pilbara shipments and record production levels achieved since April. Operating unit costs fell 5% in 2024 real terms, providing a $0.8 billion benefit, although this was partially offset by general inflation which reduced EBITDA by $0.5 billion.

Free cash flow contracted 28% to $4 billion as capital expenditure increased 28% to $12.3 billion. Net debt rose to $14.4 billion following $9 billion of bond issuance to finance the Arcadium acquisition. Despite the higher debt levels and reduced free cash flow, the board maintained the dividend at $6.5 billion, equivalent to 402 US cents per share and representing a 60% payout ratio.