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Rio Tinto Meets Annual Profit Expectations, sees Higher Costs in 2024

Feb 21 (Reuters) - Rio Tinto's full-year underlying earnings came in-line with analysts expectations on Wednesday, as production gains in its iron ore business countered weaker prices in aluminium, and warned it still faced rising costs.

Average prices Rio Tinto received for aluminium sold slipped over 2023 from COVID-era peaks, as supply chains normalised and demand from Western markets weakened. This offset a boost from production growth across major commodities.

The world's largest iron ore producer said its underlying earnings came in at $11.8 billion for 2023, compared with $13.4 billion a year earlier. That was largely in line with the LSEG consensus estimate of $11.70 billion.

Rio said it expects its Pilbara iron ore unit costs to rise in 2024 due to persistent labour and parts inflation in Western Australia.

"While inflation has eased, we continued to see lag effects in its impact on our third party costs, such as contractor rates, consumables and some raw materials; we expect this to stabilise in 2024," it said in a statement.

Rio declared a final dividend of 258.0 cents per share, up from 225.0 cents per share in 2022 and ahead of the LSEG estimate of 247.0 cents per share.

The miner booked net impairment charges of $0.7 billion, after tax, mainly related to its alumina refineries in Queensland, taken in the first half of 2023, as the assets faced challenging market conditions.

Reporting by Himanshi Akhand and Archishma Iyer in Bengaluru; Editing by Subhranshu Sahu

Source: Reuters

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