Rio Tinto, one of the world’s largest mining companies, said it will spend $1bn (£767.5m, €912.2m)over the coming years to become carbon-neutral by 2050, after reporting a 41-per cent drop in net earnings in 2019 and warning about the potential impact of the coronavirus.
The company said net earnings last year fell to $8bn, marking a decline of 41 per cent after write-downs at its Oyu Tolgoi copper and gold operation in Mongolia and its Yarwun alumina refinery in Australia last year.
“Our ambition is for net zero emissions from our operations by 2050,” the company said. “Our growth, overall, between now and 2030 will be carbon neutral. This is underpinned by approximately $1bn of climate-related spend over the next five years.”
Rio Tinto, the world’s second-largest mining company by market capitalisation, posted a seven per cent rise in sales revenues, which increased to $43.2bn, thanks to higher iron ore prices, which helped offset a decline in copper and aluminium prices.
The company said it was monitoring the spread of the coronavirus, which causes the Covid-19 respiratory disease that has killed over 2,000 in China and infected almost 80,000 around the world in the last two months.
"Our world-class portfolio and strong balance sheet serve us well in all market conditions, and are particularly valuable in the current volatile environment,” said Rio Tinto chief executive J-S Jacques. “We are closely monitoring the impact of the Covid-19 virus and are prepared for some short-term impacts, such as supply-chain issues,” he said, adding that, at present, the company’s products were currently reaching their customers.
The disease has forced the closure of factories and shops throughout China, as well as restrictions on travel. Entire cities in the world’s second-largest economy are essentially on lockdown and global growth will be slower than anticipated this year as a result, according to the International Monetary Fund.
Rio said it would increase its ordinary dividend to $3.82 ($4.87) per share for the 2019 full year, up 24 per cent from $3.07 for 2018. Rio shares were last trading almost unchanged on the day at £39.19 a share in London.