|Bid||46.97 x 800|
|Ask||46.96 x 1200|
|Day's Range||44.63 - 47.08|
|52 Week Range||44.63 - 64.02|
|Beta (5Y Monthly)||0.83|
|PE Ratio (TTM)||9.62|
|Forward Dividend & Yield||3.02 (6.39%)|
|Ex-Dividend Date||Aug 07, 2019|
|1y Target Est||51.78|
It looks like Rio Tinto Group (LON:RIO) is about to go ex-dividend in the next 4 days. This means that investors who...
Bumper profits, a climate strategy and use of an in-house social media platform helped the chief executive of Rio Tinto score a big pay rise last year. Jean-Sébastien Jacques’ total remuneration jumped 27 per cent to £5.79m, according to the company’s annual report, published on Friday. The bonus payments kicked in after Rio announced its biggest profit in eight years on the back of rising iron ore prices and suffered no fatality at its operations.
Rio Tinto today announced plans to invest around $1 billion over the next five years to support the delivery of its new climate change targets and a company objective for net zero emissions from operations by 2050.
(Bloomberg) -- Rio Tinto Group’s chief executive officer said the world must be prepared to sacrifice growth to achieve climate goals as the natural resources industry comes under increasing pressure to curb emissions.“The challenge for the world, and for the resources industry, is to continue the focus on poverty reduction and wealth creation, while delivering climate action,” Jean-Sebastien Jacques told investors on Wednesday. “This will require complex trade-offs.”Jacques said consumers, governments and shareholders must all be willing to make sacrifices -- in the form of lower consumption, growth and returns -- if climate targets are to be met. The mining industry, a key pillar of growth in many developing countries, is facing investor demands to cut the scale of emissions created by its products, from thermal coal to iron ore.“There are no easy answers,” Jacques said. “There is no clear pathway right now for the world to get to net zero emissions by 2050. The ambition is clear but the pathway is not.”Earlier, Rio reiterated its position on refusing to set any targets for reducing the carbon emissions generated by its customers, taking a firm stance on an issue that’s quickly dividing the natural resources industry.Instead, the world’s No. 2 mining company put the focus on its own operations. In a presentation on Wednesday accompanying its full-year earnings, Rio said its own business will be carbon neutral by 2050 and promised to spend $1 billion over the next five years to make that happen.The announcement draws a sharp line between Rio and other extraction companies amid a debate about who bears responsibility for Scope 3 emissions -- the pollution created when customers burn or process a company’s raw materials. The producer can take a different approach on addressing Scope 3 emissions because it sold off coal mines and doesn’t have oil assets, according to Jacques.“People are totally mixing drinks, because Scope 3 for a company like Shell and for a company like Rio Tinto is completely different,” Jacques said. “I’m not selling coal, I’m not selling carbon, and I’m not selling oil and gas -- and therefore we’re not starting from the same point.”Still, Rio has huge iron ore operations that create the vital ingredient for steelmaking, a highly polluting industry that involves adding coking coal to make carbon steel. It was a surge in iron ore prices last year that helped Rio post an 18% increase in underlying earnings to the highest since 2011.Rio argues any targets on its Scope 3 emissions would be impossible to meet because it has no control over how steelmakers use iron ore.It’s a stance that sets Rio at odds with its biggest rival, BHP Group, which has urged the industry to take responsibility. Both BHP and Vale SA have promised to introduce targets on Scope 3 emissions. In the oil industry, BP Plc has vowed to cut almost all its customer emissions by 2050.Yet, no one is providing much detail about their plans and the deadlines are usually decades away.While Rio’s refusal to set targets may draw the ire of some investors who have been pushing for concrete plans, the company may find support elsewhere. Last week, the CEO of Glencore Plc, the biggest coal shipper, criticized BP’s announcement.“2050 is a long way to go, and we don’t want to come out with wishy-washy ideas,” said Glencore boss Ivan Glasenberg. Instead, Glencore said its Scope 3 emissions would fall as coal mines are depleted.Rio has previously said it will work with China’s top steel producer, China Baowu Steel Group, to find methods to lower the sector’s emissions and improve its environmental performance.On Wednesday, the company also said that any future growth projects between now and 2030 would also have to be carbon neutral. It plans to expand the electrification of equipment and use more renewable energy.To contact the reporters on this story: Thomas Biesheuvel in London at email@example.com;David Stringer in Melbourne at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Thomasson at email@example.com, Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- A combination of hefty dividends and contracting output is turning the world’s second-largest miner into the poster child for a $1.5 trillion industry’s growth quandary.Rio Tinto Group announced a record $3.7 billion final dividend Wednesday, adding to $11.9 billion of cash returns already paid in 2019. Yet it produced less iron ore, copper and aluminum, leaving market prices to lift underlying earnings by 18%. Rio’s Pilbara operations stumbled early in the year. Its Mongolian copper mine, a key source of future production and the basis of a greener portfolio, is now not only sorely overdue and over-budget, but also tangled in international tax arbitration. The $86 billion mining giant isn’t alone. High dividend yields and pedestrian output have begun to define resources heavyweights that used to be known for the exact opposite. Diversified groups relied on their varied sources of cash to expand, but large-scale opportunities are scarcer than ever, and portfolios look far less diverse too, once coal and other less appealing assets have been carved off. At Rio, iron ore now accounts for three-quarters of its underlying Ebitda.For investors, it hasn’t been all bad news. Since Chief Executive Officer Jean-Sebastien Jacques took the helm in 2016, Rio’s total return including reinvested dividends adds up to an impressive 112%, outpacing most rivals.Yet much of that is due to generous payouts. For a company that digs stuff up for a living, this may not be sustainable — especially for one that aims to build a portfolio better aligned with a carbon-light global economy. It may also be an indication of just how hard it is to change. Rio paid shareholders in 2019 more than double its capital expenditure budget for the same year.One priority has been copper. Under Jacques, head of that unit until he became CEO, Rio has said it wants to add more of the red metal as its existing mines age, and will look at other green ingredients, those for rechargeable batteries and the like. Yet a unit set up to consider just such deals hasn’t sealed a single one despite considering more than 200 opportunities, and the company has suffered blow after blow in Mongolia. Its Oyu Tolgoi mine in the South Gobi accounts for only a fraction of Rio’s value today, but could dictate the company’s fortunes. So far, it’s mostly an unhelpful headache. The mine, which Rio holds through Canada-listed Turquoise Hill Resources Ltd., is one of the largest copper deposits around, and could produce an annual 550,000 metric tons of copper, almost as much as Rio produced last year, plus 450,000 ounces of gold. In the parlance of big miners, it moves the needle.Unfortunately, it also encapsulates everything that makes such projects so challenging: tough geography, messy local politics and complex geology. The cost of the largest, underground, portion has swelled to as much as $7.2 billion, and could rise again when a final estimate is published later in 2020. First production may now be be 30 months later than predicted. Fears of a cash call have dragged down Turquoise Hill shares.In the latest development, Rio announced last week it would begin arbitration proceedings to solve a tax dispute. Few arbitration deals yield significant victories — ask Barrick Gold Corp. and Antofagasta Plc, which won a $5.8 billion ruling against Pakistan last year — and they tend to irk host governments, so it’s a worrying sign. The risk is that Oyu Tolgoi becomes Rio Tinto’s own version of Freeport-McMoRan Inc.’s Indonesian pride and joy, Grasberg – wonderful in theory, nearly impossible in practice.Rio won’t drop Mongolia, and not just because of Jacques’ own attachment to the project. A copper option, however long-dated, is valuable, even if the company doesn’t yet jump in to buy out Turquoise Hill minority shareholders.But what then? Rio has manageable debt and ample cash — $9.2 billion in free cash flow in 2019, the highest level in almost a decade — and deals look cheaper as shares in copper-heavy Freeport and First Quantum Minerals Ltd. have roughly halved since 2018. Perhaps, though, not cheap enough to warrant wrestling with Freeport’s U.S. liabilities or First Quantum’s Zambian operations.Rio isn’t shrinking quite yet. It has exploration projects, and iron-ore production already did better in the second half, albeit still short of the company’s ultimate target. Yet with Oyu Tolgoi mired in arbitration and geological complexities, and the economy swiftly shifting, it might be time for Rio to consider just how creative it can get.To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Rio Tinto Group warned the coronavirus outbreak could “create significant uncertainty” in the short-term as it Wednesday reported a windfall from iron ore’s price surge in 2019 that spurred profits to an eight-year high.The No. 2 miner is seeking to both reward investors and fund new growth, even as rivals like Anglo American Plc cut back on returns to pivot more decisively to M&A and project spending. Rio paid out a total of $7.2 billion in full-year dividends, compared to 2019 capital expenditure of $5.5 billion.Key InsightsRio, which wins about half of its revenue from China, said all “operations are looking at opportunities to adjust to the impact of the COVID-19 virus on market conditions,” according to a statement. The Oyu Tolgoi copper operation in Mongolia earlier flagged it was experiencing a slowdown in exports to China.The company will “adjust production levels and product mix to meet customer requirements,” if the global growth outlook worsens, and teams in Singapore and Shanghai are closely monitoring the impacts of coronavirus on China.Rio aims to make its own operations carbon neutral by 2050 and pledged to spend $1 billion on the plans over the next five years. However, Rio won’t set targets for pollution caused by customers using its products, known as scope 3 emissions. That sets the producer at odds with peers like BHP Group, and BP Plc.To read more on the debate on Scope 3 emissions, click hereThe producer said it had “benefited from robust demand” for higher quality iron ore and from supply constraints in the export market last year. The company this month cut guidance on annual shipments to between 324 million and 334 million tons amid damage to infrastructure caused by a cyclone. That raises the prospect of Rio’s shipments falling for a second straight year.Rio will target first production at the Winu copper project in Western Australia in 2023, the company said.Market ReactionRio’s Sydney-traded shares have declined 2.8% in the past year, as BHP has fallen 5.3%. The earnings statement was released Wednesday after trading closed.Get MoreRead the statement here, and more details on the earnings results here.To contact the reporter on this story: David Stringer in Melbourne at firstname.lastname@example.orgTo contact the editors responsible for this story: Alexander Kwiatkowski at email@example.com, Keith GosmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Rio Tinto 2019 full year results presentation slides are available at https://www.riotinto.com/invest/financial-news-performance/regulatory-filings
Rio Tinto’s chief executive defended the miner’s decision not to set targets for reducing the carbon emissions of its customers, saying it was focused on putting its own house in order. While the Anglo-Australian group would work with its clients, which include some of the world’s biggest steelmakers, to reduce greenhouse gas emissions, chief executive Jean-Sébastien Jacques on Wednesday said his priority was on outcomes he could control. Rio on Wednesday set an “ambition” to reduce its operating emissions to net zero by 2050 and invest $1bn in climate-related projects over the next five years.
Rio Tinto Chief Executive J-S Jacques said "We have again delivered strong financial results with underlying EBITDA of $21.2 billion, underlying EBITDA margin of 47% and return on capital employed of 24%. This performance allows us to return a record final ordinary dividend of $3.7 billion, resulting in a full-year ordinary dividend of $6.2 billion and total cash returns of $7.2 billion.
Rio Tinto has pledged to reduce its greenhouse gas emissions to zero by 2050 and invest $1bn over the next five years in climate-related projects. Jean-Sébastien Jacques, chief executive, said the miner’s net zero commitment, which applies only to its own operations, was a “huge undertaking” that would mean all of its future growth would need be carbon neutral. Rio is already working with Apple and Alcoa to develop carbon-free aluminium and has just announced plans to build a solar farm to power its new iron ore mine in Australia.
While the prices of most major commodities are wilting in the face of the coronavirus spreading out of China, iron ore is rallying, proving that supply disruptions can overcome the bearish sentiment over the economic fallout of the epidemic. Spot iron ore has rallied 14% since hitting a low of $79.85 a tonne on Feb. 3, closing at $90.85 on Monday, according to commodity price reporting agency Argus. Chinese iron ore futures on the Dalian Commodity Exchange enjoyed their longest winning streak in four years, rising 16.6% from a closing low of 580 yuan ($82.50) a tonne on Feb. 10 to end at 676 yuan on Monday.
(Bloomberg Opinion) -- Sharp falls in Asian markets and U.S. stock futures Monday suggest investors are starting to catch up to the disconnect between the coronavirus’s widening impact and hopes of a V-shaped recovery.It’s a gap that has been particularly visible in metals. China, where much of the economy remains in lockdown, accounts for about half the world’s appetite for materials from iron ore to copper. That makes the sector highly vulnerable to a coronavirus-induced slowdown, and a helpful gauge of how well the reality of economic activity is being reflected in financial markets. The answer? Not enough.While some larger mills and smelters are working, disrupted transport and absent workers mean physical demand is in the doldrums. Domestic inventories of everything from steel to copper are high. Bloomberg Economics calculated last week that the world’s second-largest economy was running at 50-60% of capacity in the week ended Feb. 21. That is better than the week before and could well improve over the coming days. Still, it’s a level that seems hard to square with the way shares in miners such as BHP Group, Rio Tinto Group and others have been trading.Almost all major mining stocks bounced back after February lows, with BHP and peers falling below that only on Monday. They remain well above their troughs last year, when concerns over the U.S-China trade war rattled the market. Even copper futures on the London Metal Exchange, a reflection of confidence in the global economy rather than just physical demand, have rebounded.It’s not that investors are brushing off risk. There’s evidence of nervousness to be found in haven assets like gold, which last week broke through $1,600 an ounce. Yields on long-dated U.S. Treasuries have tumbled. More pessimistic commentary is also emerging from company executives.Investors appear to have been betting on three things. First, that the virus will be contained in the coming weeks. Second, that Beijing will unleash hefty fiscal and monetary stimulus. Finally, that demand impacted by the virus will be deferred, and not simply lost. Unfortunately, none of these things is certain. For metals and the resilient equity valuations of their producers, the coming days will be critical, as it becomes clear just how many workers emerge from quarantine and how much the Chinese government’s push to restart production is paying off. So far, the number of people on any form of transport is still a fraction of where it was a year ago, according to Bloomberg Economics.There are risks even if people do return. It’s much harder for face masks and hand sanitizer to offer protection in construction projects, which may well push back the start of the spring season, hurting steel and ingredients like iron ore. Domestic prices for steel used in manufacturing and building are still at their lowest in almost three years. BHP, which expects Chinese real GDP growth of around 6% for 2020, said last week that it would revise its forecasts lower if construction and manufacturing don’t return to normal in April.So how does that square with what equity investors are pricing in? The hope for a hefty stimulus from Beijing, which underpins much of the equity market’s buoyancy for miners and beyond, seems broadly to match what China has already said and done. There is already monetary easing and other forms of support, from help with social security payments for small companies to busing in workers in some provinces. But it’s still unclear what shape the bulk of the fiscal stimulus will take and how heavy it can be in sectors such as property, where the government remains wary of bubbles. China is also well aware that splurging on debt to get the economy moving will mean pain in the not-too-distant future. That creates plenty of uncertainty.The other two assumptions are even more problematic.Whether China can contain the virus will be hard to tell for some time, not least given Beijing’s changes to the way cases are reported. It’s unclear what will happen once sealed-off areas begin to open, given epidemics can have more than one peak. Mass quarantines at this scale are also untested in the age of supply chains. Assuming everything bounces back swiftly is optimistic. The emergence of substantial clusters outside Hubei and indeed beyond China — in South Korea, Iran and Italy — is worrying.Then there’s demand for everything from washing machines to takeaway coffee and bigger-ticket items like cars, where sales have dropped 92% in the first half of February. It’s unclear how much will be pushed back. The underlying economic uncertainty is greater than during the severe acute respiratory syndrome outbreak in 2003, when growth rebounded quickly.That all makes mining stocks and the wider equity markets look a little lofty. During SARS, Hong Kong’s market fell almost a third from its 2002 high to the trough of 2003. This time, the Hang Seng Index, admittedly with different components, is down just 6% from its pre-virus 2020 high, as of Friday. It may all blow over. For now, the risks are to the downside. To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Australia’s richest man Andrew Forrest cherishes his reputation as one of the good guys. That makes his intimate involvement in one of the world’s most polluting industries a problem.The founder of the world’s fourth-biggest iron-ore miner Fortescue Metals Group Ltd. has done spectacularly well from riding the Chinese steel boom of the past two decades. Net income at Fortescue increased nearly fourfold to $2.45 billion in the first half of the year, the company said Wednesday, delivering A$828 million ($554 million) of interim dividends to Forrest and Minderoo Group Pty., which he controls. The financial bonanza has been blessedly free of the scrutiny that ESG-focused investors such as BlackRock Inc. and Norges Bank Investment Management have devoted to thermal coal in recent months.That's rather remarkable. For all the attention on thermal coal, producing a metric ton of steel in a blast furnace releases almost as much carbon as burning a ton of coal for energy. Globally, the steel industry accounts for about 2.8 billion metric tons of annual emissions, compared to 10.1 billion tons for thermal coal. The world’s major iron ore producers are responsible for some of the largest volumes of end-use emissions globally, equivalent to those of the very biggest independent oil companies.While Fortescue doesn’t disclose such Scope 3 emissions (unusual for a company that values its reputation for responsible business practices), a back-of-the-envelope calculation suggests it accounts for around 250 million tons of carbon pollution each year. That puts the company somewhere between Rosneft Oil Co. and Glencore Plc. The 35% stake held by Forrest and Minderoo equates to annual emissions similar to those from the entire country of Bangladesh.How have steelmakers and iron miners evaded the attention of climate-focused investors? A large part of the explanation may be the perception that there’s no alternative to carbon-intensive blast furnaces to provide the world’s steel needs, rendering measures to reduce this emissions burden futile. That’s increasingly not the case, though. Electric arc furnaces making recycled metal from scrap have swept through the U.S. steel industry in recent decades to push dirtier blast furnaces aside. The same technology can be adapted to make non-recycled steel, too, and using hydrogen to burn off the oxygen from iron ore can potentially almost entirely decarbonize the steelmaking process.Swedish steelmaker SSAB AB this month announced plans with miner LKAB AB and utility Vattenfall AB to develop just such a fossil-free steel plant. While the product would cost 20% to 30% more than traditional blast furnace steel, it would be competitive at a carbon price of 40 euros ($43) to 60 euros a metric ton, according to a 2018 study — not that much more than current prices of around 25 euros in Europe’s carbon market. That would look still more attractive if falling prices for renewable electricity and hydrogen, plus wider deployment of electric furnaces, further drove down costs.Forrest is in a unique situation to push miners, steelmakers and governments to accelerate this transition. Unlike the boards and management of BHP Group, Rio Tinto Group and Vale SA, he’s the founder and chairman of his company and has a dominant shareholding.Forrest has made similar stands in the past. When he found at least 12 suppliers employing forced labor — an obvious conflict with his campaign against modern slavery — he promised to drum them out of business if they didn’t change.To date, that same principled approach hasn’t extended to the role that Fortescue and its customers play in climate change. Despite donating A$70 million to aid recovery from the bushfires which have swept Australia in recent months, he’s vacillated between citing the role of global warming in the disaster, repeating bogus claims that arson played the “biggest part” in the fires, and making questionable arguments around reducing forest litter.Pressed repeatedly in an interview with CNN last month to clarify what more he could be doing, he denied, implausibly, that the mining industry had “lobbied hard” against climate policies and said that “the science has to be done” on how to mitigate the fires. In a subsequent article for the Sydney Morning Herald, Forrest said that climate change is real and is intensifying natural disasters.Fortescue is unusually well-placed to benefit from any shift in the steelmaking industry toward a lower-carbon route. The big loser from a move away from blast furnaces would be coking coal — but unlike BHP and Vale, Fortescue doesn’t produce any. Its iron ore is of lower quality than its larger competitors, so would have most to gain from being upgraded to the iron briquettes that would be consumed by electric primary steel mills. Forrest has invested A$20 million to develop hydrogen export capacity for Australia. Using that gas for upgrading ore would represent a much better use of the technology.The risk for iron ore miners like Fortescue is that they’re betting everything on the odds that blast furnaces continue to dominate global steel production. With demand approaching a plateau, a glut of Chinese scrap looming, and rising attention on industrial carbon emissions, that’s no longer such a sure thing. A decade ago, miners were similarly full of confidence that wind and solar power could never supplant the role of thermal coal in electricity generation. How did that prediction turn out? (Corrects the second paragraph of column first published Feb. 19 to show that Minderoo Group Pty. is the entity that receives dividends; clarifies Forrest’s position on climate change in the 12th paragraph.)To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Rio Tinto will finally have more women on its board than men named Simon. The Anglo-Australian miner on Friday appointed three female non-executive directors, moving to address a lack of diversity that was becoming a cause of concern for investors. Rio, one of the world’s biggest miners, has a long-term target for women to make up one-third of its directors.
Global Miner Rio Tinto said on Friday its Mongolian unit had begun an international arbitration process, seeking to resolve a dispute with the local tax authority. "We have worked diligently with the government and tax office representatives in Mongolia to find a mutually acceptable settlement and came to the conclusion that arbitration is the best way forward to resolve this issue," Rio said in a statement. The dispute relates to taxes paid by Oyu Tolgoi between 2013 and 2015.
Rio Tinto announces that Oyu Tolgoi LLC (Oyu Tolgoi) has initiated a formal international arbitration process to seek a definitive resolution with regard to a dispute with the Mongolian Tax Authority (MTA), concerning taxes paid by Oyu Tolgoi between 2013 and 2015.
As bushfires and floods fuel public concerns in Australia about global warming, the country's powerful mining lobby is facing increasing pressure from investors to drop support for new coal mines, according to a dozen interviews with shareholders in global mining companies. Nearly a third of shareholders in BHP Group Ltd , the world's biggest miner, last year voted for resolutions to axe its membership in industry groups advocating policies counter to the Paris climate accord, which aims to limit global warming to "well below" 2 degrees Celsius.
As bushfires and floods fuel public concerns in Australia about global warming, the country's powerful mining lobby is facing increasing pressure from investors to drop support for new coal mines, according to a dozen interviews with shareholders in global mining companies. Nearly a third of shareholders in BHP Group Ltd , the world's biggest miner, last year voted for resolutions to axe its membership in industry groups advocating policies counter to the Paris climate accord, which aims to limit global warming to "well below" 2 degrees Celsius. Although the resolutions failed, pressure from shareholders and the public has since increased on companies to ensure lobby groups support the Paris goals, according to interviews with officials at investors in major mining companies like BHP, Rio Tinto Plc , Glencore Plc and Anglo American Plc .
Chinese refined copper production touched its lowest level in 20 months in January, according to an index based on satellite surveillance of copper plants. It sells data to fund managers, traders and miners, and also publishes a free monthly index of copper smelter activity. Global activity rose to an average of 90.1 in January, up 0.2 points from the previous month.
(Bloomberg Opinion) -- Mike Henry has kicked off his tenure at the helm of the world’s largest miner with a 29% increase in first-half earnings. That laudable result was fueled by iron ore, a steelmaking ingredient. BHP Group’s promised climate targets remain a work in progress. It’s a striking contrast with BP Plc’s Chief Executive Officer Bernard Looney, who started in the top job this month with a green splash. BHP would do well to seize the initiative as details unfold in the critical months ahead.Looney and Henry are, in a way, brothers in arms. Both are company veterans, at the top of $120 billion-plus resources heavyweights. Both took over this year from chief executives who came in to tackle crises, and start in a better financial position than their predecessors. Both are trying to juggle competing demands for stable production, generous payouts and the need to prepare for a carbon-light future. For both, that’s how success will be measured.The bar is low in the resources industry, which has long avoided tackling its responsibilities for the grim reality of a warmer climate. In that context, BHP and BP are both ahead of the pack. Melbourne-based BHP said last year it would hit net zero greenhouse gas emissions by 2050 for its own operations, and announced it would begin to tackle carbon produced by its customers. It had already said 2022 emissions from its mines and wells would be at or below 2017 levels. Plus, the Australian company plans to tie executive compensation more closely to climate goals. London-based BP, meanwhile, has set net-zero targets by 2050 for a wider set of emissions, partly encompassing its supply chain. Only Spain’s Repsol SA, far smaller, has been more ambitious.Lofty vision is the easy bit. Assuming they stay in place as long as their predecessors, Henry and Looney will preside over a decade that will determine the success or failure of efforts to address climate change. They, and their companies’ stock valuations, will stand apart if their efforts help investors price risk appropriately, and shed light on the future shape of the companies. Details matter more than early headlines. That means clear, measurable targets for all categories of emissions. It means a plan for fossil fuel-heavy portfolios. It means a commitment to justify spending decisions with green goals in mind, as BP and Glencore Plc have agreed to do. It’s a gargantuan challenge. First, because investors want everything: bumper earnings, hefty dividends and a future-proof business. That may not be possible. BHP’s interim figure Tuesday already disappointed some.Then, consider much of the environmental damage is done beyond the mine gate, and is therefore harder to control. For BP, those wider emissions amount to just under 90% of the total. For BHP, it’s even worse: For the 2019 financial year, it said the processing of non-fossil fuel commodities added as much as 305 million metric tons of carbon dioxide equivalent, and fossil fuel use added up to 233 million. There’s some double counting here, so the figures can’t be combined, but Australia’s total, for comparison, was just under 540 million metric tons for the year through March 2019.That means credible efforts to turn BHP’s operations greener, like the use of electric cars at its Olympic Dam project in Australia or the move to renewable energy at the Escondida copper mine in Chile. While welcome, such moves aren’t sufficient. The same goes for a $400 million, five-year climate investment program.The task over the coming months will be to come up with with measurable ambitions for the short, medium and long term, for both operational emissions and beyond. Those will need to link back to remuneration packages that also tie executives in for longer.In tandem, Henry will have to tackle BHP’s portfolio. The former head of BHP’s Minerals Australia arm said Tuesday that he wanted more options in “future facing” metals, specifically copper and nickel, used in wind turbines, solar power and rechargeable batteries. That’s encouraging, but competition is tough and scale may be smaller than the miner would prefer. Henry will also have to make a decision on the company’s Jansen potash project in the coming months.The remaining assets are a pricklier problem, including the future of oil and coal. BHP has lagged behind rivals like Rio Tinto Group, which sold its last thermal coal mine in 2018. Buyers for its thermal assets, including Mount Arthur Coal and a third of Cerrejon in Colombia, are proving scarce. It may not want to make the same mistake with metallurgical coal, even if for now margins are sounder, and substitution is difficult.All of this needs to be done against a challenging background for the commodities industry, buffeted by the coronavirus epidemic sweeping China, the world’s biggest importer of coal, iron ore and oil. BHP, with a lucrative copper business and a healthy balance sheet, has options. Henry can afford to be bold. To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Rio Tinto’s iron ore operations in the Pilbara, Western Australia, are progressively resuming following the passing of Tropical Cyclone Damien. The cyclone caused infrastructure damage across our entire Pilbara network, including impact to access roads, electrical and communications infrastructure and accommodation. All mine sites experienced some disruption and will take time to return to normal operations.
Rio Tinto has approved a $98 million (100 per cent basis) investment in a new solar plant at the Koodaideri mine in the Pilbara, Australia, as well as a lithium-ion battery energy storage system to help power its entire Pilbara power network.
Global mining group Rio Tinto is embroiled in a legal battle with a former employee who says it was aware of problems at a key copper project months before they were disclosed to investors. An’ unfair dismissal case against Richard Bowley, who worked for Rio’s copper business between 2017 and 2019 as head of strategic projects in Mongolia, threatens to expose Rio to accusations that it was slow to reveal key information on the underground expansion of the giant Oyu Tolgoi mine in the Gobi desert.