Rio Tinto Group, the world’s biggest iron ore miner, reported its highest-ever interim profit and will pay $9.1 billion in dividends as the company and its global rivals cash in on this year’s commodities rally.
Rio is the first of the majors to post earnings, kicking off a reporting season that’s expected to see record results across the board. The industry has been one of the biggest beneficiaries from the world’s efforts to emerge from the pandemic. The trillions of dollars poured into recovery packages have ignited demand for commodities like iron ore and copper, driving prices sharply higher and sending inflation pressures rippling through the global economy.
Wednesday’s results are also the first period under the leadership of new Chief Executive Officer Jakob Stausholm, who was appointed after Jean-Sebastien Jacques left the company because of a backlash over Rio’s destruction of an ancient Aboriginal site last year. The surge in commodity prices means the new boss comes in on a high note for Rio, even as the company grapples with a slew of production setbacks that have dogged its operations in recent years.
“In the first half we experienced too much operation instability. We have to sharpen the consistency of our performance,” the CEO said on a media call. “While today’s results clearly demonstrate the underlying quality of our asset base, our operational performance clearly is not where it has been in the past or where we want it to be.”
Stausholm also sounded a cautious note on the outlook for commodities demand in top consumer China.
“The long-term potential for China is still intact but we probably have seen a non-sustainable high level of industrial development in some of the months in the first half of this year,” he said on a call with reporters.
The company reported first-half underlying earnings more than doubled to $12.2 billion from the same period last year as prices for iron ore and copper surged. The half-year payout -- which includes a special dividend of $3 billion -- is more than the mining giant returned to shareholders for the whole of 2020 and higher than analysts forecast.
Recently, iron ore prices fell sharply on Wednesday amid more expectations for crude steel production curbs in China for the remainder of the year.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $143.43 a tonne, down 6.5% from Tuesday’s closing.
Tsodilo Resources (TSX.V:TSD) is sitting on a iron ore asset in Botswana.
Tsodilo Resources (TSX.V:TSD) is a junior miner exploring for world-class assets in Africa. The current focus of the company is to further develop their Xaudum Iron Formation (XIF) Project located in Botswana, Africa. There is significant potential to increase resources through further exploration. Current resources are a fraction of the potential, as the company reported an exploration target.
*The XIF exploration target was generated using inversion modelling of the ground magnetic signal which was compared to a local drill-hole model to create inversion model volume conversion factors (see below).
It is important to note that the tonnages and grade quoted in this exploration target is conceptual in nature, there has been insufficient exploration to define this fully as a mineral resource and that it is uncertain if further exploration will result in the full target being delineated as a mineral resource of 5 to 7 billion tonnes with grades ranging between 15-40% Fe.
Tsodilo Resources (TSV.V:TSD) is moving the project along as it has received government support to evaluate the full potential of this deposit. The company is currently trading at $0.95 and has 49.2 million shares outstanding, giving it a market capitalization of $46.7 million.
Disclaimer: Tsodilo Resources in a paid marketing client and we own stock options.