Wedoany.com Report-Aug. 1, Rio Tinto has reported a decline in its financial performance for the first half of 2025 (H1 2025), affected by softer commodity prices, increased capital expenditure, and tariff-related costs. The company’s net earnings fell 22% year-on-year to $4.53 billion, compared to $5.81 billion in H1 2024.

The mining giant’s net earnings plunged 22% to $4.53bn in H1 2025 from $5.81bn in H1 2024.

Underlying EBITDA dropped to $11.55 billion from $12.09 billion, while net cash generated from operating activities declined slightly by 1.9% to $6.92 billion. Free cash flow saw a sharper fall, down 31% to $1.96 billion, mainly due to higher capital investment. Capital expenditure rose to $4.73 billion from $4.02 billion in the previous period.

Rio Tinto’s net debt increased significantly, reaching $14.6 billion in H1 2025, nearly three times the $5.08 billion reported a year earlier. Tariff expenses totaled $321 million, including additional costs from increased U.S. import duties on Canadian aluminum, which rose from 25% to 50%.

Despite the earnings drop, the company maintained its 2025 production guidance across key commodities. Pilbara iron ore shipments are projected to be at the lower end of the guidance range, impacted by cyclone activity. In contrast, bauxite output is forecast at the higher end, supported by strong performance at the Amrun site.

Copper production is also expected near the top of the range, driven by results from Oyu Tolgoi and Escondida. Titanium dioxide slag output may be at the lower end of guidance due to market conditions.

Rio Tinto continues to prioritise copper and lithium development, aligning with growing demand for energy transition-related materials. The company has kept its 2025 capital investment guidance at $11 billion, which includes funding for the Arcadium lithium project.

The effective tax rate is forecast to increase to 33% in 2025 before returning to 30% in 2026. Exploration and evaluation costs are expected to come in slightly below the $1 billion guidance set for the year.

Rio Tinto CEO Jakob Stausholm stated: “Our strong cash flow enables us to maintain our practice of a 50% interim payout with a $2.4 billion ordinary dividend, as we continue our disciplined investment in profitable growth while retaining a strong balance sheet.

“We are well positioned to generate value from our best-in-class project execution, together with growing demand for our products, now and over the coming decades. We remain on track to deliver strong mid-term production growth, with solid foundations in place and a diverse pipeline of options for the future.”

The company’s strategy continues to focus on long-term asset development and maintaining financial stability despite market fluctuations.